PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 14-4183

HANOVER 3201 REALTY, LLC,

Appellant

v.

VILLAGE SUPERMARKETS, INC.; ABC

CORPORATIONS 1-10 (names being fictitious and unknown

but described as those corporations associated with Village

that assisted with and promoted the use of sham litigations

and anti-competitive acts); JOHN DOES 1-10 (names being

fictitious and unknown but described as those individuals

associated with Village that assisted with and promoted the

use of sham litigations and anti-competitive acts);

HANOVER AND HORSEHILL DEVELOPMENT LLC

_____________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civ. No. 2-14-cv-01327)

District Judge: Honorable Stanley R. Chesler

_____________

Argued: June 18, 2015

Before: AMBRO, FUENTES, and GREENBERG, Circuit

Judges

2

(Opinion Filed: November 12, 2015)

John M. Agnello, Esq.

James E. Cecchi, Esq.

Lindsey H. Taylor, Esq. [ARGUED]

Carella Byrne Cecchi Olstein Brody & Agnello

5 Becker Farm Road

Roseland, NJ 07068

Attorneys for Appellant, Hanover 3201 Realty, LLC

Anthony Argiropoulos, Esq. [ARGUED]

Thomas Kane, Esq.

Epstein Becker & Green

One Gateway Center

Newark, NJ 07102

David W. Fassett, Esq.

Arseneault & Fassett

560 Main Street

Chatham, NJ 07928

Attorneys for Appellees, Village Supermarkets, Inc. and

Hanover and Horsehill Development LLC

OPINION OF THE COURT

FUENTES, Circuit Judge, with whom AMBRO, Circuit

Judge, joins as to Parts II.A.2, II.B, and II.C, and

GREENBERG, Circuit Judge, joins as to Part II.A.

3

Hanover 3201 Realty, LLC (“Hanover Realty”) signed

a contract with Wegmans to develop a supermarket on its

property in Hanover, New Jersey. The agreement required

Hanover Realty to secure all necessary governmental permits

and approvals prior to breaking ground. Village

Supermarkets, Inc. (“ShopRite”) owns the local ShopRite.

Once ShopRite and its subsidiary Hanover and Horsehill

Development LLC (“H&H Development”) (collectively,

“Defendants”) caught wind that Wegmans might be entering

the market, they filed numerous administrative and court

challenges to Hanover Realty’s permit applications.

Believing these filings were baseless and intended only to

frustrate the entry of a competitor, Hanover Realty sued

Defendants for antitrust violations. Hanover Realty alleged

that Defendants attempted to restrain the market for full-

service supermarkets as well as the market for full-service

supermarket rental space. The District Court dismissed the

suit, holding that Hanover Realty did not have antitrust

standing because it was the wrong plaintiff—it was not a

competitor, consumer, or participant in the restrained markets

and thus did not sustain the type of injury the antitrust laws

were intended to prevent. 1

We conclude that, with respect to the claim for

attempted monopolization of the market for full-service

supermarkets, the District Court took too narrow a view of

antitrust injury. Hanover Realty can establish that its injury

1 For the reasons set forth in Part III of Judge Ambro’s partial

concurrence, I agree with Judge Ambro’s decision to use an

“issue voting” approach to determine the outcome of the

judgment in this case.

4

was “inextricably intertwined” with Defendants’

anticompetitive conduct. However, as to the claim for

attempted monopolization of the market for rental space, the

District Court correctly found no standing because Hanover

Realty does not compete with Defendants in that market. We

also hold that Hanover Realty has sufficiently alleged that the

petitioning activity here was undertaken without regard to the

merits of the claims and for the purpose of using the

governmental process to restrain trade. As such, Hanover

Realty can demonstrate that Defendants are not protected by

Noerr-Pennington immunity because their conduct falls

within the exception for sham litigation. Accordingly, we

will affirm in part, vacate in part, and remand to the District

Court for further proceedings.

5

I. BACKGROUND

Plaintiff Hanover Realty is a real estate developer and

the owner of a plot of land in Hanover, New Jersey.2 In July

2012, Hanover Realty entered into a lease and site-

development agreement with Wegmans for the purpose of

constructing a “full-service supermarket.” App. 66. These

types of supermarkets, in contrast to their local grocery store

counterparts, provide customers with a “one-stop shopping”

experience. App. 67. Full-service supermarkets supply not

only traditional groceries, but also additional amenities,

including prepared foods to go, on-site dining options, wine

and liquor, specialty products, and other services such as

pharmacies, banks, and fitness centers. The site-development

agreement placed the burden on Hanover Realty to obtain all

necessary governmental permits prior to beginning

construction. If Hanover Realty was unable to secure the

required permits within two years of the agreement,

Wegmans could walk away from the deal.

Defendant ShopRite is the proprietor of 26 ShopRite

supermarkets in New Jersey, including a ShopRite in Hanover

that is about two miles away from the site of the proposed

Wegmans. The ShopRite opened in November 2013 and

replaced the previous one in Morris Plains, which has since

closed. Defendant H&H Development, a wholly-owned

subsidiary of ShopRite, owns the property on which the

Hanover ShopRite sits, and leases the land or building to

2 Unless otherwise indicated, the facts are taken from the

amended complaint, documents relied upon in that complaint,

and matters of public record. See Schmidt v. Skolas, 770 F.3d

241, 249 (3d Cir. 2014).

6

ShopRite. ShopRite and H&H Development have the same

decision makers. Hanover Realty alleges that the ShopRite in

Hanover is the only full-service supermarket operating in the

greater Morristown area.

Once news broke that Wegmans was coming to town,

Defendants launched a petitioning campaign designed to

block Hanover Realty from obtaining the permits and

approvals it needed to proceed with the project. We describe

these filings here.

First, Hanover Realty applied for a Flood Hazard Area

Permit (“Flood Permit”) from the New Jersey Department of

Environmental Protection (“Environmental Department”).

After Hanover Realty received the permit, ShopRite (on

behalf of itself and H&H Development) submitted an appeal

to the Environmental Department requesting an adjudicatory

hearing and seeking an order that would vacate the permit.

Defendants asserted that they had standing to bring the appeal

because the then-existing ShopRite in Morris Plains would be

“detrimentally impacted” by the competition from the

Wegmans. App. 74. Over the next five months, Defendants

submitted additional documents to the Environmental

Department, including an objection that Hanover Realty

failed to comply with relevant notice requirements and an

amended request for an adjudicatory hearing.

About a month after Hanover Realty filed its amended

complaint in this action, the Environmental Department

issued an order denying Defendants’ request for a hearing. It

first found that ShopRite had no standing, explaining that

“[c]ourts have consistently held that proximity or any type of

generalized property right shared with other property owners

such as recreational interests, traffic, views, quality of life,

7

and property values are insufficient to demonstrate a

particularized property right required to establish third party

standing for a hearing.” App. 157. ShopRite’s “generalized

property rights” and its claim of “greater competition” from

the proposed Wegmans were not enough to show that it was

an aggrieved party. The Environmental Department also

evaluated the substance of Defendants’ arguments and found

them without merit.

Second, Hanover Realty submitted a multi-permit

application to the Environmental Department seeking various

wetlands approvals (“Wetlands Permit”) for the Wegmans

project. An ecological consulting firm sent a letter to the

Environmental Department on behalf of Defendants raising

various challenges to this permit. One objection was that

Hanover Realty’s notice to neighboring landowners was

“technically deficient.” App. 77. In response to this

objection, and as “required” by the Environmental

Department, Hanover Realty corrected this “administrative

error” the next week and submitted a revised application.

App. 169. The ecological consultant also voiced its concern

that the site of the proposed Wegmans was a potentially

suitable habitat for certain endangered species, including the

Indiana bat.3 A few days later, Defendants submitted another

letter to the Environmental Department, this time requesting a

meeting to discuss the Wetlands Permit and “strongly

3 Indiana bats may be found over a broad swath of the United

States, including New Jersey. But true to name, half of this

bat population does, in fact, hibernate in Indiana. See Indiana

Bat Fact Sheet, U.S. Fish & Wildlife Service,

http://www.fws.gov/midwest/endangered/mammals/inba/inba

fctsht.html (last visited Aug. 13, 2015).

8

urg[ing]” it to “diligently and prudently” review the permit

and not act with “haste” in granting approval. App. 78. In

the following months, Defendants’ ecological consultant

complained to the United States Fish and Wildlife Service

about the Wetlands Permit. In one email to the Wildlife

Service, the consulting firm praised itself for “manag[ing] to

delay the issuance of the [Wetlands] approvals based on a

technicality” and said that its substantive objections “may

delay things a bit longer.” App. 80. Hanover Realty

responded to Defendants’ multifaceted challenge with its own

submissions, explaining why, in its view, each objection was

unsubstantiated. Moreover, Hanover Realty alleges that

Defendants knew the wetlands at issue are not federally

regulated waters, but nonetheless contacted the Wildlife

Service to add friction to the review process.

The Environmental Department issued Hanover Realty

its requested Wetlands Permit, subject to various conditions.

One such condition required Hanover Realty to conduct a

survey for the presence of Indiana bats prior to construction.4

After the Environmental Department issued the permit,

Defendants submitted a request for an adjudicatory hearing to

challenge the approval.5

Third, the tract of land owned by Hanover Realty has

been the subject of several contracts and sales over the years,

4 In its appellate brief, Hanover Realty informs us that it

conducted the Indiana bat survey and no bats were found.

5 In a supplemental letter filed with the Court, Hanover Realty

says that, in June 2015, the Environmental Department denied

Defendants’ request for a hearing.

9

including a four-phased developer’s agreement with the New

Jersey Department of Transportation that dates back to 1978.

Under that agreement, the owner of the land must make

certain road improvements as it reaches various phases of

development. Hanover Realty believed the Wegmans project

would trigger Phase III of the agreement. Consistent with

that understanding, Hanover Realty submitted an application

for a Major Street Intersection Permit (“Street Permit”) to the

Department of Transportation in which it proposed

improvements to a nearby intersection in connection with the

Wegmans project. Defendants submitted a letter objecting to

the application, and then proceeded to file a number of open

public records requests seeking additional information upon

which they could contest the application. Defendants then

sent another letter to the Department of Transportation

informing it that the Wegmans project would trigger Phase IV

of the developer’s agreement. As a result, Defendants said,

Hanover Realty was required to build an overpass over a

nearby highway before it could proceed any further. Hanover

Realty and its traffic engineering consultant submitted letters

of their own, explaining that the Phase IV requirements

(including the overpass) were not implicated by the Wegmans

project. Hanover Realty alleges that Defendants knew the

Phase IV obligations were not triggered because their counsel

had negotiated the developer’s agreement.

The Department of Transportation issued a letter

responding to the parties’ various submissions relating to the

Street Permit application. The letter began by acknowledging

that the Department of Transportation is “required to consider

any relevant data, analysis, and arguments submitted by third

parties.” App. 165. It then agreed with Defendants that the

proposed development would generate traffic at certain hours

that would exceed the level of traffic contemplated by Phases

10

I, II, and III of the developer’s agreement. Moreover,

although it did not specifically mention the overpass or

whether Phase IV obligations would be implicated, the

Department of Transportation said the Wegmans project

“would trigger the need for additional highway improvements

as stipulated in the [developer’s] agreement.” App. 167. It

noted, however, that the “improvements may no longer be

appropriate or feasible” and therefore recommended that

Hanover Realty negotiate a modification to the agreement

with the Department of Transportation. App. 167.6

Fourth, in mid-2012, Hanover Realty applied to the

Hanover Township Committee to rezone the property of the

proposed Wegmans so that it could be used for retail space.

The next summer, Hanover Realty received approval of its

final site plan and request for a bulk variance. Defendants did

not lodge any objections during that year-long process.

Instead, in August 2013, ShopRite (on behalf of itself and

H&H Development) filed an action in lieu of prerogative

writs in New Jersey state court seeking to nullify the

approval. Over the next several months, Defendants filed

three amended complaints, which Hanover Realty alleges

were filed for the purpose of delay.

In June 2014, after Hanover Realty had filed its

amended complaint in the present litigation, the Superior

Court of New Jersey issued an order dismissing the

prerogative writs action. The court found that ShopRite was

6 Hanover Realty informs us in a letter that, after

renegotiating the developer’s agreement and otherwise

revising its proposal, the Department of Transportation issued

the Street Permit in April 2015.

11

not an “interested party” because it failed to allege facts

suggesting its “right to use, acquire, or enjoy either of its

nearby properties” would be affected by the approval of

Hanover Realty’s site plan. App. 136. In addition, the court

rejected ShopRite’s argument that it had standing based on its

status as a local taxpayer. After ruling against ShopRite on

the standing issue, the court also addressed and disposed of

ShopRite’s arguments on the merits.

Frustrated by Defendants’ many legal challenges,

Hanover Realty sued Defendants in federal court. In its

amended complaint, Hanover Realty alleges that Defendants’

administrative objections and state-court suit were mere

anticompetitive shams designed to keep Wegmans out of the

market. Specifically, it asserts claims under Section 2 of the

Sherman Act for attempted monopolization of and conspiracy

to monopolize the greater Morristown full-service

supermarket market (Count One) and the greater Morristown

full-service supermarket shopping center market, which it

describes as the market for supermarket rental space (Count

Two). The amended complaint also contains five-state law

claims.

Defendants moved to dismiss the complaint for four

independent reasons. The District Court found the threshold

issue of antitrust standing dispositive and dismissed the

complaint on that ground. It observed that, as a general

matter, plaintiffs in antitrust suits must be either consumers or

competitors of the defendant in the restrained market—here,

the markets for supermarkets and supermarket rental space.

Hanover Realty was neither a consumer nor competitor of

Defendants in either market. The District Court

acknowledged the limited exception to the

consumer/competitor requirement for persons whose injuries

12

are “inextricably intertwined” with the harm caused by

defendants. But it found Hanover Realty did not fit within

that narrow exception either. As a result, Hanover Realty had

suffered no antitrust injury and thus had no antitrust standing

to pursue its Sherman Act claims.7 Without a federal claim in

play, the District Court declined to exercise supplemental

jurisdiction over the state-law claims. Hanover Realty

appealed.8

II. DISCUSSION

Defendants raise four arguments in support of the

District Court’s order: (1) Hanover Realty does not have

antitrust standing; (2) Defendants’ petitioning activity was

protected by the Noerr-Pennington doctrine; (3) Hanover

Realty has not sufficiently alleged that there is a dangerous

probability of Defendants achieving monopoly power; and

(4) Hanover Realty has failed to plead a specific intent to

monopolize.

7 The District Court also dismissed the parts of Counts One

and Two that assert a conspiracy to violate the Sherman Act

because Hanover Realty failed to allege the particulars of this

conspiracy. As Hanover Realty does not challenge this

finding on appeal, we affirm the dismissal of Counts One and

Two to the extent they contain conspiracy claims.

8 The District Court had jurisdiction under 15 U.S.C. § 15 and

28 U.S.C. §§ 1331 and 1367, and we have jurisdiction to

review the District Court’s final order under 28 U.S.C.

§ 1291. We review de novo a district court’s grant of a

motion to dismiss and construe all facts in the light most

favorable to the nonmoving party. See Rea v. Federated

Investors, 627 F.3d 937, 940 (3d Cir. 2010).

13

A. Antitrust Standing

We begin with antitrust standing. Section 2 of the

Sherman Act prohibits any attempt to monopolize. 15 U.S.C.

§ 2. Section 4 of the Clayton Act, in turn, defines the class of

persons who may bring a private antitrust suit as “any person”

who is injured “by reason of anything” prohibited by the

antitrust laws. Id. § 15(a). This extraordinarily broad

language reflects the Clayton Act’s remedial purpose and

Congress’s intent to “create a private enforcement mechanism

that would deter violators and deprive them of the fruits of

their illegal actions, and would provide ample compensation

to the victims of antitrust violations.” Blue Shield of Va. v.

McCready, 457 U.S. 465, 472 (1982). Emphasizing § 4’s

expansive reach, the Supreme Court has explained that the

“statute does not confine its protection to consumers, or to

purchasers, or to competitors, or to sellers. . . . The Act is

comprehensive in its terms and coverage, protecting all who

are made victims of the forbidden practices by whomever

they may be perpetrated.” Id. (quoting Mandeville Island

Farms, Inc. v. Am. Crystal Sugar Co., 334 U.S. 219, 236

(1948)).

Although a literal reading of § 4’s grant of authority to

sue arguably is limited only by the minimal requirements of

constitutional standing, the Supreme Court has interpreted

this provision more restrictively than that. See Hawaii v.

Standard Oil Co. of Cal., 405 U.S. 251, 262 n.14 (1972)

(“Congress did not intend the antitrust laws to provide a

remedy in damages for all injuries that might conceivably be

traced to an antitrust violation.”). Thus, even when there is a

clear violation of the antitrust laws, § 4 allows only a “proper

plaintiff” to bring a private suit to remedy that violation. See

14

Associated Gen. Contractors of Cal., Inc. v. Cal. State

Council of Carpenters, 459 U.S. 519, 544 (1983). In other

words, only certain plaintiffs have “antitrust standing.” Id. at

535 n.31. In describing how to undertake the antitrust

standing inquiry, the Supreme Court has warned that, because

of the “infinite variety of claims” that may arise under § 4, a

“black-letter rule” cannot dictate the result in every case. Id.

at 536. Instead, the Court has articulated several guideposts.

See id. at 536-57. We have distilled these antitrust standing

factors as follows:

(1) the causal connection between the antitrust

violation and the harm to the plaintiff and the

intent by the defendant to cause that harm, with

neither factor alone conferring standing; (2)

whether the plaintiff’s alleged injury is of the

type for which the antitrust laws were intended

to provide redress; (3) the directness of the

injury, which addresses the concerns that liberal

application of standing principles might

produce speculative claims; (4) the existence of

more direct victims of the alleged antitrust

violations; and (5) the potential for duplicative

recovery or complex apportionment of

damages.

In re Lower Lake Erie Iron Ore Antitrust Litig., 998 F.2d

1144, 1165-66 (3d Cir. 1993) (citing Associated Gen., 459

U.S. at 545). Although we weigh these factors together on a

case-by-case basis, the second factor, antitrust injury, “is a

necessary but insufficient condition of antitrust standing.”

Barton & Pittinos, Inc. v. SmithKline Beecham Corp., 118

F.3d 178, 182 (3d Cir. 1997).

15

Antitrust injury has proven difficult to define and

apply. The Supreme Court has described it as “injury of the

type the antitrust laws were intended to prevent and that flows

from that which makes defendants’ acts unlawful.”

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477,

489 (1977). In evaluating the nature of a plaintiff’s injury,

the Supreme Court instructs us to keep in mind that “the

Sherman Act was enacted to assure customers the benefits of

price competition” and “protect[] the economic freedom of

participants in the relevant market.” Associated Gen., 459

U.S. at 538. Based on these principles, we have said that,

“[a]s a general matter, the class of plaintiffs capable of

satisfying the antitrust-injury requirement is limited to

consumers and competitors in the restrained market . . . and to

those whose injuries are the means by which the defendants

seek to achieve their anticompetitive ends.” W. Penn

Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 102 (3d

Cir. 2010) (citing cases). As Hanover Realty offers distinct

theories of injury for each of its attempted monopolization

claims—one for the market for full-service supermarkets

(Count One) and another for the market for full-service

supermarket rental space (Count Two)—we discuss these

claims separately.

1. Full-Service Supermarkets

Hanover Realty admits it is neither a competitor nor a

consumer in the market for full-service supermarkets; it is a

land owner and lessor of property, not a food retailer. It

instead argues that its injuries were “inextricably intertwined”

with Defendants’ attempt to monopolize that market.

The Supreme Court first recognized this form of

antitrust injury in McCready. McCready was an employee

covered by a group health plan purchased from the defendant

16

Blue Shield. McCready, 457 U.S. at 468. Under the plan,

Blue Shield agreed to reimburse subscribers such as

McCready for services provided by psychiatrists, but not by

psychologists. McCready was treated by a psychologist and

sought reimbursement for her bills, but Blue Shield denied

payment. She then filed suit against Blue Shield and a

psychiatric society alleging that the two had engaged in an

unlawful antitrust conspiracy to exclude psychologists from

receiving payment under the Blue Shield plan. Id. at 469.

The defendants argued that McCready had not suffered

antitrust injury because the alleged conspiracy was directed at

psychologists and not at subscribers of group health plans.

Id. at 478. The Supreme Court rejected the defendants’ view

of antitrust standing, explaining that the § 4 “remedy cannot

reasonably be restricted to those competitors whom the

conspirators hoped to eliminate from the market.” Id. at 479.

Although McCready was not a competitor of the defendants,

“the injury she suffered was inextricably intertwined with the

injury the conspirators sought to inflict on psychologists and

the psychotherapy market.” Id. at 483-84 (emphasis added).

And while McCready was a consumer in the market for

psychotherapy services, the Supreme Court’s explanation of

why she suffered antitrust injury emphasized not her status as

a market participant, but rather that she was directly targeted

for harm by parties ultimately wishing to inflict a derivative

harm on a competitor. As the Court noted, “[d]enying

reimbursement to subscribers for the cost of treatment was the

very means by which it is alleged that Blue Shield sought to

achieve its illegal ends.” Id. at 479. The harm to subscribers

like McCready was not only clearly foreseeable, “it was a

necessary step in effecting the ends of the alleged illegal

conspiracy.” Id.

17

Underscoring that its reasoning was not limited to

consumers, the Court offered the following hypothetical to

crystalize the nature of McCready’s injury: “If a group of

psychiatrists conspired to boycott a bank until the bank

ceased making loans to psychologists, the bank would no

doubt be able to recover the injuries suffered as a

consequence of the psychiatrists’ actions.” Id. at 484 n.21.

McCready and the bank “are in many respects similarly

situated,” the Court explained, even though the bank is not a

customer or consumer in the psychotherapy market. See id.

Both were used as conduits to harm the defendants’ actual

competitors. Because imposing harm on McCready was an

indispensable aspect of the scheme, the Court concluded that

the injury to McCready

“reflect[ed] Congress’ core concerns” in prohibiting the

defendants’ conduct. Id. at 481.

In contrast to McCready, where the alleged harm to the

plaintiff was the primary means of the defendants’

anticompetitive conduct, harm that is secondary to the

anticompetitive conduct cannot support antitrust injury. For

example, we have said that, “[a]lthough a supplier may lose

business when competition is restrained in the downstream

market in which it sells goods and services, such losses are

merely byproducts of the anticompetitive effects of the

restraint,” and do not qualify as antitrust injury. W. Penn

Allegheny, 627 F.3d at 102. To illustrate, in Ethypharm S.A.

France v. Abbott Laboratories, 707 F.3d 223, 225-26 (3d Cir.

2013), a foreign drug manufacturer, Ethypharm, used a

domestic distributor to sell one of its drugs in the United

States market. After Abbott, the distributor of another drug,

sued the domestic distributor for patent infringement,

Ethypharm sued Abbott for antitrust violations. We rejected

the notion that Ethypharm’s injury was inextricably

18

intertwined with the alleged scheme. See id. at 237. To

effectuate its conspiracy, Abbott needed only to place

restrictions on Ethypharm’s domestic distributor and thus any

harm suffered by Ethypharm was incidental, rather than

essential, to the restraint on trade. See id. at 233. Similarly,

in Broadcom Corp. v. Qualcomm, Inc., 501 F.3d 297, 319-20

(3d Cir. 2007), the plaintiff’s asserted basis for antitrust

standing was that the defendant’s restraint in one market

injured it by suppressing the demand of participants in the

restrained market for the plaintiff’s supply of goods in

another market. As in Ethypharm, we said the alleged injury

was not inextricably intertwined with the anticompetitive

scheme because it crossed markets and was attenuated from

the anticompetitive conduct. See id. at 320-21. Together,

Ethypharm and Broadcom support the proposition that

suppliers and other non-market participants generally do not

have antitrust standing unless their injuries were the very

means by which the defendants carried out their illegal ends.

As we said in West Penn Allegheny, “[a]s a general matter,

the class of plaintiffs capable of satisfying the antitrust-injury

requirement is limited to consumers and competitors in the

restrained market . . . and to those whose injuries are the

means by which the defendants seek to achieve their

anticompetitive ends.” 627 F.3d at 102 (emphasis added).

Because Hanover Realty alleges that its harm was the

essential component of Defendants’ anticompetitive scheme

as opposed to an ancillary byproduct of it, we conclude that

Hanover Realty has sufficiently pleaded antitrust injury under

McCready. The ultimate objective of the defendants in

McCready was to injure psychologists, not plan subscribers.

To achieve that goal, they refused to reimburse subscribers

for visits to psychologists, thereby encouraging subscribers to

visit psychiatrists. Without injuring those subscribers, there

19

was no conspiracy. Likewise, McCready’s hypothetical bank,

which was neither a consumer nor competitor in the

psychotherapy market, sustained actionable injury because it

was directly harmed as the means of injuring psychologists.

Similar reasoning applies here. The end goal of

Defendants’ alleged anticompetitive conduct was to injure

Wegmans, a prospective competitor. To keep Wegmans out

of the market, Defendants sought to impose costs not on their

competitor, but on Hanover Realty, the party tasked with

obtaining the necessary permits before construction could

begin. Absent this relationship between Hanover Realty and

Wegmans, Defendants’ conduct “would have been without

purpose or effect.” Steamfitters Local Union No. 420 Welfare

Fund v. Philips Morris, Inc., 171 F.3d 912, 923 (3d Cir.

1999). And Defendants would succeed in their scheme either

by inflicting such high costs on Hanover Realty that it was

forced to abandon the project or by delaying the project long

enough so that Wegmans would back out of the agreement.

In both scenarios, injuring Hanover Realty was the very

means by which Defendants could get to Wegmans; Hanover

Realty’s injury was necessary to Defendants’ plan.

Had Wegmans purchased the property from Hanover

Realty and itself applied for the permits, the costs imposed by

Defendants’ challenges would have qualified as antitrust

injuries. It should make no difference that the parties’ lease

shifted these costs to Hanover Realty. See McCready, 457

U.S. at 479 (observing that antitrust injury “cannot reasonably

be restricted to those competitors whom [defendants] hoped

to eliminate from the market”). Regardless of who bore these

costs, Defendants’ objective remained the same: to keep

Wegmans out of the relevant market.

20

Defendants seize on language from our precedent

saying “we have not extended the ‘inextricably intertwined

exception beyond cases in which both plaintiffs and

defendants are in the business of selling goods or services in

the same relevant market,’ though they may not directly

compete against each other.” See Ethypharm, 707 F.3d at 237

(quoting Broadcom, 501 F.3d at 320-21). According to

Defendants, because Hanover Realty and ShopRite do not

operate in the same market, “Hanover Realty cannot establish

antitrust injury unless the Court were to break with

Ethypharm and Broadcom and greatly expand the scope of

the ‘inextricably intertwined’ exception—an expansion that

would swallow the rule.” Appellees’ Br. at 19.

Defendants read too much into these statements.9 As

9 We pause to note that at least one of our cases discussing

antitrust injury contains language that is potentially

overstated. In Barton & Pittinos, without mentioning the

“inextricably intertwined” doctrine, we found no antitrust

injury because the plaintiff was “not a competitor or a

consumer in the market in which trade was allegedly

restrained.” 118 F.3d at 184. We later cast doubt on that

statement, clarifying that the conclusion in Barton, “if

construed as an absolute (which arguably it need not be), may

in some circumstances lead to results that conflict with

Supreme Court and other precedent.” Carpet Grp. Int’l v.

Oriental Rug Importers Ass’n, Inc., 227 F.3d 62, 76 (3d Cir.

2000), overruled on other grounds, Animal Science Prods.,

Inc. v. China Minmetals Corp., 654 F.3d 462 (3d Cir. 2011).

We, of course, agree with Carpet Group and our other cases

that have allowed for the possibility of antitrust injury based

on a showing of harm that is inextricably intertwined with the

21

an initial matter, just because we have not extended the

exception beyond parties that sell goods or services in the

same market by no means suggests we shouldn’t (or can’t )

do so. In fact, McCready suggests the opposite conclusion.

McCready did not sell goods or services in the psychotherapy

market—she was a subscriber to a health insurance plan. Nor

was the hypothetical bank in McCready even a participant in

the psychotherapy market. Nonetheless, both sustained harm

that was inextricably intertwined with the defendants’

misconduct. Because § 4 “does not confine its protection to

consumers, or to purchasers, or to competitors, or to sellers”

we must avoid placing artificial limits on who may bring suit

under the antitrust laws. McCready, 457 U.S. at 472

(citations omitted). Moreover, our comments in Ethypharm

and Broadcom must be read in context. As we discussed, the

alleged injuries to the plaintiffs in those cases were

byproducts of anticompetitive restraints in separate markets.

In contrast, although Hanover Realty and ShopRite operate in

separate markets, the very essence of Defendants’ scheme

was to impose expense and delay on Hanover Realty as a

means of keeping Wegmans out of the relevant market.

Defendants’ final line of defense against a finding of

antitrust injury rests on cases from other jurisdictions. In an

industry notorious for low profit margins, perhaps it is not

surprising that this is just the latest in a series of cases in

which a supermarket allegedly employed anticompetitive

tactics to keep a competitor out of the market.10 Defendants

defendant’s wrongdoing, rather than harm just to competitors

or consumers.

10 See, e.g., Serfecz v. Jewel Food Stores, 67 F.3d 591 (7th

Cir. 1995); Southaven Land Co. v. Malone & Hyde, Inc., 715

22

rely mostly on the Sixth Circuit’s decision in Southaven Land

Co. v. Malone & Hyde, Inc., 715 F.2d 1079.

Southaven was an owner-lessor of commercial space

and Malone operated a number of grocery stores in the

neighborhood. Southaven, 715 F.2d at 1080. Malone

assumed a lease to premises owned by Southaven, but the

parties later agreed to cancel the agreement. However, upon

learning that Southaven intended to find a grocery store to fill

the vacancy, Malone refused to cancel the contract. Malone

continued to pay rent on the vacant lot and did not otherwise

breach any of its contractual obligations. Id. at 1087.

Southaven nonetheless sued for antitrust violations, alleging

that Malone intended to leave the space vacant so as to

destroy competition for its other grocery stores. The Sixth

Circuit rejected Southaven’s argument that its injury was

inextricably intertwined with the injury Malone sought to

inflict on the grocery market. Id. at 1086-87. It explained

that “Southaven [a real estate lessor] is not alleged to be a

member of a class of ‘consumers’ of grocery products or a

class otherwise manipulated or utilized by Malone as a

fulcrum, conduit or market force to injure competitors or

participants” in the relevant market. Id. at 1086. Rather,

Southaven’s injury was, at most, a “tangential by-product” of

the alleged monopolistic conduct. Id. at 1086-87.

We do not find Southaven persuasive here because it

addressed a different set of facts and a different kind of

F.2d 1079 (6th Cir. 1983); Acme Mkts., Inc. v. Wharton

Hardware & Supply Corp., 890 F. Supp. 1230 (D.N.J. 1995);

Rosenberg v. Cleary, Gottlieb, Steen & Hamilton, 598 F.

Supp. 642 (S.D.N.Y. 1984).

23

injury. Southaven’s only economic harm was the vague

allegation that Malone was “subvert[ing] [its] business and

financial interests.” Id. at 1087. This supposed subversion of

business interests was not the means by which Malone was

trying to achieve its illegal ends; it was an incidental effect in

the real estate rental market rather than the grocery market.

Indeed, by continuing to pay rent and honoring its contractual

obligations, Malone arguably did not intend to harm

Southaven at all. As in Ethypharm and Broadcom, the

alleged downstream harm was too attenuated to support

antitrust injury. In fact, Southaven supports the view that

there was antitrust injury here, for Hanover Realty was used

as the “fulcrum, conduit or market force” that was missing in

Southaven. Forcing Hanover Realty to pay thousands of

dollars in legal fees to defend itself against alleged

anticompetitive filings and imposing significant delays on the

project were the very means by which Defendants sought to

keep a competitor out of the market.11 For all these reasons,

we conclude that Hanover Realty has sufficiently alleged

antitrust injury in the market for full-service supermarkets

because its injury was inextricably intertwined with

Defendants’ monopolistic conduct.

11 Defendants also urge us to follow Rosenberg, a decades-old

district court decision from outside this circuit. Although

Rosenberg involved similar facts to those here—competitor

supermarkets filing a series of lawsuits to enjoin the

construction of a new supermarket—the court’s legal analysis

is not persuasive. See 598 F. Supp. at 643-44. The court

mechanically applied Southaven without even mentioning the

possibility of antitrust injury based on the “inextricably

intertwined” exception. Id. at 645.

24

In his dissent in part, Judge Ambro says that, in his

view, a “plaintiff has not suffered antitrust injury unless its

own harm stems from the anticompetitive consequences of

the defendant’s conduct.” Judge Ambro Op. at 3. According

to Judge Ambro, the plaintiff’s injury in McCready was

actionable because she was a consumer in the psychotherapy

market and Blue Shield “used a classic antitrust harm—

increased prices—as a fulcrum to distort” that market. Id. at

4. Judge Ambro believes that McCready was “injured

because of the anticompetitive effects” of Blue Shield’s

conduct, but that Hanover Realty did not sustain a similar

type of injury. Id. In our view, Judge Ambro’s analysis

resembles that espoused by then-Justice Rehnquist in his

dissent in McCready. Justice Rehnquist said that McCready

could not recover under the antitrust laws because she

“alleges no anticompetitive effect upon herself”—her harm

did not arise from an increase in price, decrease in availability

of services, or reduction in competition. McCready, 457 U.S.

at 489 (Rehnquist, J., dissenting).

The majority agreed that McCready did not suffer one

of these traditional forms of antitrust harm, but that did not

foreclose relief. See id. at 482-83. She suffered antitrust

injury because the harm imposed on her—denying

reimbursement for visits to her psychologist—was the very

means by which Blue Shield sought to harm psychologists.

Similarly, Hanover Realty does not allege a classic antitrust

harm, but it nonetheless sufficiently alleges antitrust injury

because its harm was the very means by which Defendants

sought to keep Wegmans out of the market. Indeed, Hanover

Realty was the immediate target and bore the costs of

Defendants’ scheme.

Moving to the other four factors of the antitrust

25

standing analysis, we first find that Hanover Realty

sufficiently alleges a causal connection between the antitrust

violation and its harm. Defendants’ alleged sham petitioning

caused Hanover Realty to pay thousands of dollars in

attorney’s fees and costs in filing its responses.

The next two factors are interrelated and go to the

directness of the injury and the existence of more direct

victims of the antitrust violations. These both favor Hanover

Realty as well. Under McCready, a plaintiff can suffer direct

injury even if the defendant’s anticompetitive conduct

ultimately targets a third party; although the defendants there

sought to harm competing psychologists and not the plaintiff

health plan subscriber, the Supreme Court declared that the

denial of reimbursement for those receiving treatment from

psychologists injured the plaintiff “directly.” 457 U.S. at 483.

Likewise, Defendants’ legal challenges directly injured

Hanover Realty. If Defendants’ attempt to prevent Wegmans

from leasing the property fails, then Hanover Realty will have

suffered the costs of responding to the legal challenges while

Wegmans may have experienced no loss at all. In addition, to

the extent Defendants succeed in obstructing the lease,

Hanover Realty’s loss of rent under the contract would result

directly and not through “several somewhat vaguely defined

links.” Associated Gen., 459 U.S. at 540. That Wegmans is

another possible direct victim “does not diminish the

directness of [Hanover Realty’s] injury.” Lower Lake Erie,

998 F.2d at 1168-69.

The final factor, the potential for duplicative recovery

or complex apportionment of damages, also supports

standing. Hanover Realty’s recovery of the costs of

responding to the legal challenges would not pose a risk “of

overlapping damages as no other [party has] suffered this

26

distinct type of injury.” Id. at 1164 n.11. Furthermore, any

damages awarded for the delay or obstruction of the lease

would not yield duplicative recovery as the lost rent to

Hanover Realty would have to be subtracted as a cost from

any subsequent claim by Wegmans for lost profits. See id. at

1169 n.22. Although this last scenario would require some

apportionment of damages, the calculation would not be

complex.

Accordingly, Hanover Realty has adequately alleged

antitrust standing on its claim for attempted monopolization

of the market for full-service supermarkets.

2. Full-Service Supermarket Shopping

Centers

Hanover Realty does not rely on the “inextricably

intertwined” doctrine for its attempted monopolization claim

concerning the market for full-service supermarket shopping

centers. Instead, Hanover Realty argues that it directly

competes in this market for rental space with H&H

Development, which owns the land on which the ShopRite

resides.

Antitrust injury ordinarily is limited to consumers and

competitors in the restrained market. See Ethypharm, 707

F.3d at 233. If doubts arise as to whether the parties are

competitors, we look to see whether “there is a cross-

elasticity of demand between the plaintiffs’ offering and the

defendants’ offering.” Carpet Grp., 227 F.3d at 77. Such

cross-elasticity exists where customers of the defendant

would switch to the plaintiff if the defendant raised its prices.

Id. at 77 n.13.

Hanover Realty argues that both it and H&H

27

Development compete in the marketplace for supermarket

rental space because they “both operate an enterprise in it.”

Appellant’s Br. at 44. We are not persuaded. According to

Hanover Realty, H&H Development is a wholly-owned

subsidiary of ShopRite; the two have the same decision

makers; H&H Development owns no property other than the

land on which the ShopRite sits; and H&H Development

leases that property to its parent. Hanover Realty fails to

explain how it competes with H&H Development as a

supermarket landlord in any meaningful way. For example, it

does not argue there is any cross-elasticity between Hanover

Realty’s and H&H Development’s offerings. If a traditional

supermarket landlord raised rent to an excessive level, then

the supermarket presumably would move its business to

another property, such as Hanover Realty’s. But why would

H&H Development raise ShopRite’s rent given that they have

the same decision makers? As H&H Development’s sole

purpose is to own the ShopRite property, Hanover Realty

never alleges that H&H Development is competing for any

tenants other than its parent—to the extent one can even call

that “competing.” Because Hanover Realty cannot establish

antitrust injury in the market for full-service supermarket

shopping centers, it has no standing to bring its attempted

monopolization claim of this market. Therefore, we affirm

the dismissal of Count Two of the amended complaint.

B. Noerr-Pennington

Having survived (in part) the threshold issue of

antitrust standing, we proceed to Hanover Realty’s next major

28

obstacle: Noerr-Pennington immunity.12 The Noerr-

Pennington doctrine takes its name from a pair of Supreme

Court cases that placed a First Amendment limitation on the

reach of the Sherman Act. See E. R.R. Presidents Conference

v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961); United

Mine Workers of Am. v. Pennington, 381 U.S. 657 (1965).

Noerr-Pennington provides broad immunity from liability to

those who petition the government, including administrative

agencies and courts, for redress of their grievances. Cal.

Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 510

(1972). Although Noerr-Pennington is a powerful shield, it is

not absolute. Noerr itself recognized “[t]here may be

situations” in which a petition “is a mere sham to cover what

is actually nothing more than an attempt to interfere directly

with the business relationships of a competitor and the

application of the Sherman Act would be justified.” Noerr,

365 U.S. at 144. And so spawned the “sham” exception.

Two Supreme Court cases have explored the contours

of this exception. In California Motor, the respondents, a

group of highway carriers, alleged that the petitioners,

another group of highway carriers, engaged in

anticompetitive conduct by instituting state and federal

proceedings to defeat the respondents’ applications for

operating rights. 404 U.S. at 509. The Court held that the

12 Although the District Court did not discuss Noerr-

Pennington, we will address this issue in the first instance

because it raises questions of law over which we exercise

plenary review and has been fully briefed by the parties. See

Hudson United Bank v. LiTenda Mortg. Corp., 142 F.3d 151,

159 (3d Cir. 1998). The same goes for Defendants’ other

arguments for dismissal, which we discuss further below.

29

complaint demonstrated a sham because it contained

allegations that respondents “sought to bar their competitors

from meaningful access to adjudicatory tribunals and . . . to

usurp that decisionmaking process” by “institut[ing] the

proceedings and actions . . . with or without probable cause,

and regardless of the merits of the cases.” Id. at 512 (internal

quotation marks omitted). In other words, the allegations, if

proven, showed that the “administrative and judicial

processes have been abused.” Id. at 513.

The Court returned to the exception in Professional

Real Estate Investors, Inc. v. Columbia Pictures Industries,

Inc., 508 U.S. 49 (1993). There, after the respondents filed a

single copyright suit against the petitioners, the petitioners

responded with an antitrust action, dubbing the copyright suit

a sham. The Supreme Court outlined a two-part definition of

sham litigation. Id. at 60. First, “the lawsuit must be

objectively baseless in the sense that no reasonable litigant

could realistically expect success on the merits.” Id. The

existence of probable cause to institute the legal proceeding

irrefutably demonstrates that the antitrust plaintiff has not

proved the objective prong. Id. at 63. If the antitrust plaintiff

fails to satisfy the objective prong, the analysis ends and the

defendant is immune from suit. Only if the underlying

litigation is objectively meritless does the court address the

second factor: the litigant’s subjective motivations. Id. at 60.

Under this second part of the test, the court asks whether “the

baseless lawsuit conceals an attempt to interfere directly with

the business relationships of a competitor . . . through the use

[of] the governmental process—as opposed to the outcome of

that process—as an anticompetitive weapon.” Id. at 60-61

(citations and internal quotation marks omitted).

30

Following California Motor and Professional Real

Estate, questions arise as to the relationship between these

two cases. Hanover Realty argues that, because Defendants

filed a series of petitions without regard to merit, its

allegations are in line with those from California Motor.

Defendants respond by pointing to the Supreme Court’s more

recent two-step analysis in Professional Real Estate, arguing

that we must find each petition objectively baseless before

assessing Defendants’ subjective motivations.13

Three other Courts of Appeals have reconciled

13 Defendants maintain that Hanover Realty waived its

argument regarding applying the California Motor analysis

because it never raised this issue before the District Court and

it did not raise the issue on appeal until its supplemental reply

brief. See Gardiner v. V.I. Water & Power Auth., 145 F.3d

635, 646-47 (3d Cir. 1998). Defendants argue that, before the

District Court, Hanover Realty agreed it had to satisfy the test

from Professional Real Estate. We disagree that Hanover

Realty has waived this argument. Throughout this litigation

Defendants have consistently argued for Noerr-Pennington

immunity and Hanover Realty has consistently responded that

the sham exception applies. Hanover Realty’s failure to cite

particular cases within its broader argument for the sham

exception does not amount to a waiver. Moreover, by

alleging an “illegal scheme” through a “series of sham

litigations,” Hanover Realty put Defendants on notice of the

relevant facts supporting its theory under California Motor.

App. 63. Finally, Defendants have not been prejudiced by

this argument because we exercise plenary review over this

issue and they have filed a supplemental brief responding to

Hanover Realty’s position.

31

California Motor and Professional Real Estate by concluding

that they apply to different situations: California Motor to a

series of sham petitions and Professional Real Estate to a

single sham petition.14 See Waugh Chapel S., LLC v. United

Food & Commercial Workers Union Local 27, 728 F.3d 354,

363-364 (4th Cir. 2013); Primetime 24 Joint Venture v. Nat’l

Broad. Co., 219 F.3d 92, 101 (2d Cir. 2000); USS-POSCO

Indus. v. Contra Costa Cnty. Bldg. & Constr. Trades Council,

AFL-CIO, 31 F.3d 800, 810-11 (9th Cir. 1994).

In the first case to tackle this issue, the Ninth Circuit

explained that, in its view, the two-step inquiry in

Professional Real Estate applies to the evaluation of a single

suit or legal proceeding. USS-POSCO, 31 F.3d at 810-11. In

such a case, the analysis is retrospective: if the alleged sham

petition is not objectively baseless, defendants are immune—

end of story. See id. at 811. California Motor, by contrast, is

concerned with a defendant who brings a series of legal

proceedings. The Supreme Court there “recognized that the

filing of a whole series of lawsuits and other legal actions

without regard to the merits has far more serious implications

than filing a single action.” Id. Thus, when faced with a

series or pattern of lawsuits, “the question is not whether any

one of them has merit—some may turn out to, just as a matter

14 A staff report from the Federal Trade Commission also

agrees with this view. See Federal Trade Commission,

Enforcement Perspectives on the Noerr-Pennington

Doctrine, at 28-38 (2006) (“FTC Report”), available at https:/

/www.ftc.gov/sites/default/files/documents/advocacy_docum

ents/ftc-staff-report-concerning-enforcement-perspectives-

noerr-pennington-doctrine/p013518enfperspectnoerr-

penningtondoctrine.pdf.

32

of chance—but whether they are brought pursuant to a policy

of starting legal proceedings without regard to the merits and

for the purpose of injuring a market rival.” Id. Unlike the

inquiry from Professional Real Estate, this inquiry is

prospective and asks whether the legal filings were made,

“not out of a genuine interest in redressing grievances, but as

part of a pattern or practice of successive filings undertaken

essentially for purposes of harassment.” Id.

We agree with the approach to California Motor and

Professional Real Estate that has been adopted by the

Second, Fourth, and Ninth Circuits. As stated in Noerr itself,

the ultimate purpose of this inquiry is to determine whether

the petitioning activity is a “mere sham to cover what is

actually nothing more than an attempt to interfere directly

with the business relationships of a competitor.” Noerr, 365

U.S. at 144. The best way to make that determination

depends on whether there is a single filing or a series of

filings. Where there is only one alleged sham petition,

Professional Real Estate’s exacting two-step test properly

places a heavy thumb on the scale in favor of the defendant.

With only one “data point,” it is difficult to determine with

any precision whether the petition was anticompetitive. See

FTC Report at 35. Thus, Professional Real Estate requires a

showing of objective baselessness before looking into

subjective motivations in order to prevent any undue chilling

of First Amendment activity. In contrast, a more flexible

standard is appropriate when dealing with a pattern of

petitioning. Not only do pattern cases often involve more

complex fact sets and a greater risk of antitrust harm, but the

reviewing court sits in a much better position to assess

whether a defendant has misused the governmental process to

curtail competition. As a result, even if a small number of the

petitions turn out to have some objective merit, that should

33

not automatically immunize defendants from liability. See

USS-POSCO, 31 F.3d at 811 (“[E]ven a broken clock is right

twice a day.”).

Accordingly, when a party alleges a series of legal

proceedings, we conclude that the sham litigation standard

from California Motor should govern. This inquiry asks

whether a series of petitions were filed with or without regard

to merit and for the purpose of using the governmental

process (as opposed to the outcome of that process) to harm a

market rival and restrain trade. In deciding whether there was

such a policy of filing petitions with or without regard to

merit, a court should perform a holistic review that may

include looking at the defendant’s filing success—i.e., win-

loss percentage—as circumstantial evidence of the

defendant’s subjective motivations. Compare Waugh, 728

F.3d at 365 (finding sham where one of fourteen proceedings

was successful), with USS-POSCO, 31 F.3d at 811 (finding

no sham where fifteen of twenty-nine lawsuits were

successful), and Kaiser Found. Health Plan, Inc. v. Abbott

Labs., Inc., 552 F.3d 1033, 1046 (9th Cir. 2009) (finding no

sham where defendant “won seven of the seventeen suits” and

each of the ten remaining cases “had a plausible argument on

which it could have prevailed”). If more than an insignificant

number of filings have objective merit, a defendant likely did

not have a policy of filing “willy-nilly without regard to

success.” See USS-POSCO, 31 F.3d at 811. A high

percentage of meritless or objectively baseless proceedings,

on the other hand, will tend to support a finding that the

filings were not brought to redress any actual grievances. See

City of Columbia v. Omni Outdoor Adver., 499 U.S. 365, 380

(1991) (explaining that “the filing of frivolous objections . . .

simply in order to impose expense and delay” is the “classic

example” of a sham). Courts should also consider other

34

evidence of bad-faith as well as the magnitude and nature of

the collateral harm imposed on plaintiffs by defendants’

petitioning activity (e.g., abuses of the discovery process and

interference with access to governmental agencies). See

Professional Real Estate, 508 U.S. at 68 (Stevens, J.,

concurring).

Defendants argue as a threshold matter that the four

actions they filed against Hanover Realty are too few to even

qualify as a pattern or series. We are not convinced. In so

concluding, we do not set a minimum number requirement for

the applicability of California Motor or find that four sham

petitions will always support the use of California Motor. It

is sufficient for our purposes that four petitions were filed

against Hanover Realty and it alleges that Defendants filed

these sham proceedings at every opportunity to obstruct

Hanover Realty from “obtaining all necessary government

approvals.” App. 71.

Turning to Hanover Realty’s allegations, we conclude

it can establish that Defendants had a policy of filing

anticompetitive sham petitions. Defendants’ challenge to the

Flood Permit was objectively baseless. The Environmental

Department issued Hanover Realty its permit and found that

ShopRite had only a generalized property interest and its

claim of greater competition did not demonstrate it was an

aggrieved party. Courts have “consistently” rejected the

types of arguments offered by Defendants, the Environmental

Department explained. App. 157. In addition to the lack of

objective merit, Hanover Realty alleges indicia of bad faith.

For example, it alleges that, five months after they submitted

a request for an adjudicatory hearing, Defendants filed an

amended request with “new” proposed facts that were already

known to Defendants at the time they submitted their initial

35

request. The “only basis” for this filing, Hanover Realty

alleges, was to slow down the review process. App. 76.

Defendants’ alleged tactic suggests they were more interested

in delay than in redressing any grievances.

Similarly, with respect to the action in lieu of

prerogative writs, the New Jersey state court easily found that

ShopRite was not an interested party because it failed to show

how any of its rights would be affected by the approval of

Hanover Realty’s site plan. The court dismissed the

complaint. We agree that Defendants’ arguments for why

they had standing are objectively baseless. Hanover Realty

also alleges that Defendants filed three amended complaints

only for the purpose of delay. This allegation indicates that

Defendants’ complaint was not brought out of a genuine

desire to obtain relief, but rather to keep the suit pending as

long as possible.

Defendants claim two victorious moments with respect

to the Wetlands Permit. They first point to the fact that they

successfully identified a technical deficiency in the

application, and that the Environmental Department required

Hanover Realty to correct this administrative error. We liken

this to hitting a single in the second inning. Hanover Realty

submitted a new application within days and the problem was

resolved. See Waugh, 728 F.3d at 365 (“[T]he fact that there

may be moments of merit within a series of lawsuits is not

inconsistent with a campaign of sham litigation.”).

Defendants also remind us that the Environmental

Department required Hanover Realty to conduct a survey for

the presence of Indiana bats, as it had requested. But this also

does not qualify as success. The ostensible goal of

Defendants’ challenge was for the Environmental Department

to deny the Wetlands Permit. They were unsuccessful on that

36

front; Hanover Realty received the permit. Hanover Realty

also alleges subjective evidence of abusing the governmental

process. Defendants allegedly complained to the United

States Fish and Wildlife Service even though they knew the

wetlands at issue are not federally regulated waters.

Moreover, in an email, Defendants’ ecological consultant

touted its ability to delay the permit approval process.

Defendants arguably fared slightly better in connection

with their challenge to the Street Permit. They submitted

objections to the Department of Transportation arguing,

among other things, that Hanover Realty was required to

build an overpass over a highway before beginning

construction. In its letter responding to the parties, the

Department of Transportation did acknowledge that it was

required to consider any data or arguments submitted by third

parties. Defendants extract success from that statement, but

we do not. That the Department of Transportation was

required to consider Defendants’ challenge does not mean

that their arguments had any bite. Where Defendants did

have some success, however, was in the Department of

Transportation’s finding that the prior developer’s agreement

triggered the need for additional highway improvements.

But, rather than requiring Hanover Realty to make those

improvements, the letter recognized that such construction

might not be feasible or worthwhile. It therefore

recommended that Hanover Realty negotiate a modification

to the agreement with the Department of Transportation

before proceeding any further. This action was a partial

success because Defendants’ challenge did have some merit,

but it did not cause the Department of Transportation to

actually reject the permit application.

All in all, the allegations and the record show that

37

Hanover Realty received the Flood and Wetlands Permits, it

got the state-court action dismissed, and it avoided having to

make significant highway improvements. Defendants’

meager record on the merits supports Hanover Realty’s

allegation that that the filings were not brought to redress any

grievances. Nor have Defendants articulated any genuine

interest in flooding or traffic near the proposed Wegmans

(which is two miles away from the ShopRite), or in protecting

the Indiana bat. Rather, Hanover Realty sufficiently alleges

that Defendants brought these actions under a policy of

harassment with the effect of obstructing Hanover Realty’s

access to governmental bodies. The filings have imposed

significant expense on Hanover Realty, have continued to

delay the project, and threaten the viability of the project

altogether. That Defendants have had some insignificant

success along the way does not alter the analysis when

reviewing a pattern or series of proceedings. Accordingly,

Hanover Realty can establish that the sham exception to

Noerr-Pennington immunity applies because it sufficiently

alleges that Defendants “instituted the proceedings and

actions . . . with or without probable cause, and regardless of

the merits of the cases.” Cal. Motor, 404 U.S. at 516.15

C. Remaining Arguments

15 Defendants also argue that, because some of the

proceedings are ongoing, Hanover Realty’s suit is premature.

We reject this argument because the California Motor

analysis is prospective, not retrospective. See USS-POSCO,

31 F.3d at 810-11. If we were to agree with Defendants on

this point, they could keep filing petitions and avoid judicial

review indefinitely.

38

Defendants contend that Hanover Realty has failed to

allege facts showing that there is a “dangerous probability of

[Defendants] achieving monopoly power.” W. Penn

Allegheny, 627 F.3d at 108. In support of this position,

Defendants argue that Hanover Realty has not adequately

alleged a product or geographic market.16

According to Defendants, Hanover Realty has not

properly defined the alleged product market for full-service

supermarkets because it has not distinguished full-service

supermarkets from any other supermarkets or grocery stores.

Defendants believe this supposed submarket is a contrivance.

We disagree. “Competing products are in the same market if

they are readily substitutable for one another; a market’s outer

boundaries are determined by the reasonable

interchangeability of use between a product and its substitute,

or by the cross-elasticity of demand.” Broadcom, 501 F.3d at

307 (citing Brown Shoe Co. v. United States, 370 U.S. 294,

325 (1962)). Moreover, “in most cases, proper market

definition can be determined only after a factual inquiry into

the commercial realities faced by consumers.” Queen City

Pizza, Inc. v. Domino’s Pizza, Inc., 124 F.3d 430, 436 (3d

Cir. 1997). We cannot say, at this very early stage in the

litigation, that Hanover Realty’s product market is

implausible. Hanover Realty alleges that full-service

supermarkets are distinct from other grocery suppliers

because they provide customers with additional amenities,

16 Because we already found that Hanover Realty does not

have antitrust standing for its claim of attempted

monopolization of the full-service supermarket shopping

center market (Count Two), we address here only the claim

relating to full-service supermarkets (Count One).

39

including prepared foods to go, on-site dining options, wine

and liquor, specialty products, and other services such as

pharmacies, banks, and fitness centers. Hanover Realty

further alleges that consumers have come to enjoy full-service

supermarkets as a one-stop shopping experience that allows

them to avoid driving to different stores to check off the items

on their grocery lists. Because consumers plausibly treat full-

service supermarkets as a distinct submarket, the allegations

here support the position that the market for full-service

supermarkets “encompass[es] all interchangeable substitute

products.” Id. Through discovery, Hanover Realty may be

able to demonstrate that a price increase at the ShopRite

would not cause consumers to shop at other more traditional

grocery stores.

Defendants also argue that the proposed geographic

market—greater Morristown—is too imprecise. In

Defendants’ view, Hanover Realty has not alleged facts

suggesting that ShopRite could raise prices without causing

consumers to drive elsewhere. Again, we disagree. “[T]he

relevant geographic market is the area in which a potential

buyer may rationally look for the goods or services he or she

seeks.” Eichorn v. AT&T Corp., 248 F.3d 131, 147 (3d Cir.

2001) (internal quotation marks omitted). Hanover Realty

alleges that, when it comes to buying groceries, consumers

like to shop near their homes. Thus, it alleges, proximity to a

large upscale population is an important factor in determining

where to locate a full-service supermarket. We find it

plausible that greater Morristown, which includes Morristown

and its neighboring communities, is a distinct geographic

market. If the ShopRite in Morristown raised its prices, it is

plausible that only the most diligent and frugal customer

40

would move his or her grocery shopping to a more distant

supermarket.17

III. CONCLUSION

For the foregoing reasons, we will affirm in part,

vacate in part, and remand to the District Court for further

proceedings consistent with this opinion.

17 We have considered and rejected Defendants’ remaining

arguments. They argue there is no dangerous probability of

achieving a monopoly because there is another full-service

supermarket in the area—the Stop & Shop of Morris Plains.

Defendants maintain that Hanover Realty has admitted this

fact. But in making that argument, Defendants rely on

Hanover Realty’s initial complaint, not its amended

complaint, which is operative. In the amended complaint,

Hanover Realty alleges that the Stop & Shop is a “grocery

store,” App. 72, and that ShopRite is the “only full-service

supermarket” in Greater Morristown, App. 73. We must

accept those allegations as true. Defendants’ final argument

is that Hanover Realty has failed to allege a specific intent to

monopolize. For the reasons discussed above in connection

with the Noerr-Pennington doctrine, we conclude Hanover

Realty sufficiently alleges that Defendants filed a series of

sham proceedings with the intent to interfere with a

prospective competitor and restrain trade.

Hanover 3201 Realty LLC v. Village Supermarkets

No. 14-4183

AMBRO, Circuit Judge, dissenting in part and concurring in

part.

I respectfully disagree with my colleagues’ view that Hanover 3201 Realty has suffered antitrust injury, a necessary component of antitrust standing. In my view, because the anticompetitive effects of Village Supermarkets’ actions (as opposed to the damages sustained directly from any tort) do not hurt Hanover, a landlord and not a player in the market for full-service supermarkets, it lacks antitrust standing to bring this suit.

However, I recognize that my colleagues’ view of antitrust standing is, by virtue of their ruling, the holding of our Court and now the law of this Circuit. In this context, I believe I am obliged to consider the merits of Hanover’s suit. Among other things, I agree with Judge Fuentes that Village’s Noerr–Pennington immunity defense is a sham and hence unavailing at this stage. Thus I vote to vacate the judgment of the District Court and remand.

This sets the stage for a most interesting interplay of whether to vote by issue (in which case Hanover wins, as, while I lose on the issue of standing, I align with Judge Fuentes on the lack of merit for Village’s claim of immunity under Noerr-Pennington) or outcome (whereby Village wins, as my outcome, though for different reasons, aligns with Judge Greenberg’s). I opt for the former for the reasons noted below.

2

I. Hanover Lacks Antitrust Standing

A. Law of Antitrust Injury

In order to state a claim for violation of the antitrust laws, a plaintiff must show that it has suffered “antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes [the] defendants’ acts unlawful.” Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). Antitrust injury is a necessary but not sufficient component of antitrust standing, a prudential limitation on the Clayton Act’s broad language concerning the right to sue. Barton & Pittinos, Inc. v. SmithKline Beecham Corp., 118 F.3d 178, 182 (3d Cir. 1997).

We have held that a plaintiff ordinarily does not suffer “antitrust injury” if it is “not a competitor or a consumer in the market allegedly restrained,” id. at 181, unless “there exists a ‘significant causal connection’ such that the harm to the plaintiff . . . [is] ‘inextricably intertwined’ with the antitrust conspiracy,” Gulfstream III Associates, Inc. v. Gulfstream Aerospace Corp., 995 F.2d 425, 429 (3d Cir. 1993) (quoting Blue Shield v. McCready, 457 U.S. 465, 484 (1982)). This exception is narrow, and antitrust injury is “almost exclusively suffered by consumers or competitors.” Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912, 926 (3d Cir. 1999).1

1 Our law that a plaintiff ought to be a consumer or

competitor and that the “inextricably intertwined” injury

presents a limited “exception” to this “requirement” is not the

only way to read the relevant Supreme Court cases. The

leading case on antitrust standing treated consumer-or-

3

My principal disagreement with my colleagues concerns how to read the “inextricably intertwined” exception. As I understand their opinion, they hew closely to the meaning of those two particular words and believe that a plaintiff has suffered an antitrust injury if its injury is closely related to a defendant’s actions that also amount to an antitrust violation. By contrast, I believe the rule remains that “antitrust injury should reflect the anticompetitive effect either of the violation or of anticompetitive acts made possible by the violation.” Brunswick, 429 U.S. at 489. In my view, even if a plaintiff has suffered direct harm from a defendant’s acts, and even if those acts violate the antitrust laws, it has not suffered antitrust injury unless its own harm stems from the anticompetitive consequences of the defendant’s conduct.

As the majority notes, the “inextricably intertwined” language comes from the Supreme Court’s decision in McCready, a case with exceptionally broad dicta about antitrust standing. In that case, the plaintiff, who was insured by Blue Shield, saw a psychologist. McCready, 457 U.S. at 468. Blue Shield allegedly colluded with psychiatrists to divert patients like McCready from psychologists by declining to reimburse the latter’s services. Id. at 469–70. It argued that McCready had not suffered antitrust injury because neither psychiatrists’ nor psychologists’ prices

competitor status as one of several factors a court should

weigh in considering whether a plaintiff has antitrust

standing, Associated Gen. Contractors v. Cal. State Council

of Carpenters, 459 U.S. 519, 539 (1983), and in other circuits

consumer-or-competitor status is less strongly emphasized.

See, e.g., Novell, Inc. v. Microsoft Corp., 505 F.3d 302, 311

(4th Cir. 2007). However, it is the settled law of our Court.

4

increased as a result of its scheme (ignoring the de facto price increase of the insurance company’s failure to reimburse the insured), id. at 481–84, and that the point of the alleged scheme was to harm psychologists, not their insured patients, id. at 478–79.2 But the Supreme Court held that “[a]lthough McCready was not a competitor of the conspirators [psychiatrists and Blue Shield], the injury she suffered was inextricably intertwined with the injury the conspirators sought to inflict on psychologists and the psychotherapy market.” 457 U.S. at 483–84.

The reason McCready’s injury was inextricably intertwined with the harm inflicted on the psychotherapy market was that she was a consumer in that market and her “injuries [were] the essential means by which defendants’ illegal conduct brought about its ultimate injury to the marketplace.” Ethypharm S.A. France v. Abbott Labs., 707 F.3d 223, 237 n.21 (3d Cir. 2013) (quoting IIA Philip E. Areeda, et al., Antitrust Law ¶ 339, at 123 (3d ed. 2007)). However, the term “essential means” does not mean that anyone who suffers any injury in the context of an anticompetitive scheme may sue under the antitrust laws. In McCready, although the plaintiff was not the ultimate target of the cartel’s activity, Blue Shield and the psychiatrists used a classic antitrust harm—increased prices—as a fulcrum to distort the psychotherapy market, specifically to the detriment of psychologists. The McCready Court affirmed that a person who suffers antitrust injury— i.e., who is injured because of

2 Blue Shield’s argument was based in part on a now-

outmoded theory that only the “target” of an antitrust

violation could bring suit. Id. at 478 n.14 & 479 n.15; see

also Associated Gen. Contractors, 459 U.S. at 536 n.33

(rejecting “target area” theory).

5

the anticompetitive effects of a cartel or monopolist’s activity—may bring suit even if that person is not a consumer from whom the defendant seeks to extract supracompetitive rents or a competitor the defendant seeks to eliminate. See IIA Areeda, supra, ¶ 339, at 144 (4th ed. 2014) (“[T]he result of the alleged antitrust conspiracy would be higher prices in the very market in which McCready was a purchaser. . . . McCready is thus like a purchaser from a cartel at cartel prices.”).

B. Hanover Has Not Suffered Antitrust Injury

Here, Hanover alleges monopolization of two markets, one for “full service supermarkets,” and one for “full service supermarket shopping centers,” the latter defined as the market for real property that can be used for full-service supermarkets. It does not participate in the supermarket business; it is a landlord and developer. It operates a development enterprise in the real-estate market, but it does not sell goods or provide consumer services the way Village does. And although Hanover does participate in the market for real property that can be used for full-service supermarkets, Village’s actions have not affected that market. In other words, Hanover does not participate in the market that was allegedly restrained, and the market it does participate in was not restrained. Hanover has thus not suffered an antitrust injury.

1. Full-service Supermarket Market

Unlike the relationship in McCready between the plaintiff and the market for psychotherapy services, whether the market for full-service supermarkets is ultimately restrained does not matter to Hanover. Its injuries flow from Village’s alleged wrongful use of civil proceedings and from

6

Hanover’s contract with Wegmans that allocated to Hanover some portion of the risk of failing to develop the parcel within a certain period of time. Village’s alleged attempted monopolization of the relevant markets hurts Wegmans, a full-service supermarket, and it hurts consumers who would prefer a choice among supermarkets, but as Village is not alleged to have restrained the market for real estate in Morristown or anywhere else, it is hard to see why Hanover is a proper antitrust plaintiff even if it has valid tort claims arising out of otherwise anticompetitive conduct. In short, because the anticompetitive effects of Village’s allegedly illegal activity have not caused any injury to Hanover, it does not have an antitrust claim.

Several sources of authority support the notion that a landlord is an improper antitrust plaintiff when it complains of injury flowing from antitrust harm directed at a tenant. The leading treatise deals with the situation in one terse paragraph: “The landlord receiving a set rather than variable rent is simply a supplier of an input . . . . Such landlords are almost always denied standing for antitrust violations that target their tenants or that occur in the product market.” IIA Areeda, supra, ¶ 351c, at 286. We have also disposed of claims brought by landlords without much analysis beyond indicating that any injury the landlord suffered, even when its rent was tied to the tenant’s revenue, was too remote from the antitrust violation to allow the landlord to bring suit.

[A] non-operating lessor-owner of a motion picture theatre who is entitled to rental based on a percentage of receipts is nonetheless not a “person . . . injured in his business or property” within the meaning of section 4 of the Clayton Act, 15 U.S.C. § 15, and, therefore, is not entitled to bring suit under the Act for an alleged conspiracy relating to the licensing of

7

pictures at the theatre by the lessee-operator.

Melrose Realty Co. v. Loew’s, Inc., 234 F.2d 518, 519 (3d Cir. 1956) (per curiam); see also Harrison v. Paramount Pictures, Inc., 211 F.2d 405, 405 (3d Cir. 1954) (affirming for the reasons stated in the District Court’s opinion, see 115 F. Supp. 312 (E.D. Pa. 1953), which held that a movie theater lessor was too remote from antitrust harm directed at movie distributors). More recently, we held that “[a] supplier does not suffer an antitrust injury when competition is reduced in the downstream market in which it sells goods or services.” W. Penn Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 102 (3d Cir. 2010). And a landlord is in the same shoes as a supplier from an antitrust-injury perspective. IIA Areeda, supra, ¶ 351c at 286.

Other courts of appeals that have faced facts similar to our case have rejected the landlord’s standing. Most closely on point is Serfecz v. Jewel Food Stores, 67 F.3d 591 (7th Cir. 1995), where owners and operators of a shopping mall sought to recover damages from an anchor tenant, a grocery store. The tenant opened another store nearby, vacated its old premises, and would not sublease them to another grocery store. The Seventh Circuit Court held that the “plaintiffs d[id] not have the requisite direct injury to have standing to assert that [the defendant] ha[d] monopolized, or conspired with others to monopolize, the retail grocery market,” id. at 598–99, because plaintiffs were players in the shopping center market, not the retail grocery business.

Similarly, in a Sixth Circuit case a grocery store subleased to a competitor grocery store and then engaged in anticompetitive conduct to ruin it. Southaven Land Co. v. Malone & Hyde, Inc., 715 F.2d 1079, 1081 (6th Cir. 1983). The plaintiff, a landlord that owned the rest of the shopping center of which the grocery store was a part, found a

8

replacement grocery store, but the defendant would not sublease to it, presumably lowering the value of the shopping center. The Court noted that “Southaven’s [the land owner’s] injury [was] charged to have accrued as a result of its contract negotiations with the alleged antitrust violator. The complaint noticeably fail[ed] to aver that Southaven sustained any injury as a competitor, purchaser, consumer or other economic actor in the grocery industry.” Id. at 1081. Ultimately, the Court held that as “Southaven is not a consumer, customer, competitor or participant in the relevant market or otherwise inextricably intertwined with any such entity[, i]ts injury [was] not sufficiently linked to the pro-competitive policy of the antitrust laws” to confer standing on it. Id. at 1087; accord Rosenberg v. Cleary, Gottlieb, Steen & Hamilton, 598 F. Supp. 642, 645–46 (S.D.N.Y. 1984) (“No matter how causal a relationship may exist between the alleged violation and injury, the defendants’ actions were not undertaken to interfere with the economic freedom of participants in the construction business.”).

Because I read the Supreme Court’s and our cases on antitrust standing to require a plaintiff’s harm to be at least “inextricably intertwined” with whatever makes a defendant’s conduct specifically an antitrust violation—e.g., higher prices or reduced output—I believe Hanover lacks standing with respect to the allegedly unlawful restraint of the full-service supermarket market. Hence I respectfully dissent from the decision of my colleagues to reverse on this issue.

2. Full-Service Supermarket Shopping Center Market

Hanover also alleges that it competes directly with H&H, the special purpose entity that owns the land for Village’s supermarket, in the “full service supermarket shopping center market” of greater Morristown. This title for

9

the market, besides being a mouthful, is confusing, as the market players are said to be landowners “whose property is or can be utilized by or rented to a full-service supermarket.” Am. Compl. ¶ 32, J.A. 69. Thus the market is for certain real property. The Serfecz plaintiffs, who lacked standing insofar as they alleged monopolization of the retail grocery market, nevertheless had standing with respect to the shopping center market. 67 F.3d at 599. This was because they had ownership interests in a mall, and the defendant (a former anchor tenant and grocery store) allegedly colluded with a different shopping center to drive Serfecz’s mall out of business. Id. at 595, 599. Hanover argues that H&H and Village are trying to keep Hanover out of the full-service supermarket shopping center market in the same way that the Serfecz defendants allegedly drove the plaintiffs out of the mall business.

Unlike the plaintiffs in Serfecz, neither Hanover nor H&H is specifically in the business of operating shopping centers. Instead, they are owners and developers of real property. Hanover does not allege, for example, that its parcel’s value decreased following Village and H&H’s attempts to exclude competitors from the market for owning land on which supermarkets can be leased. And the Complaint does not allege that Village’s efforts have affected the market for real property in Morristown or anywhere else to any significant degree. As Hanover has not plausibly alleged that Village’s monopolistic conduct has injured it as a landowner, it cannot be said that the frustration of its contract with Wegmans “reflect[s] the anticompetitive effect . . . of the violation.” Brunswick, 429 U.S. at 489; cf. IIA Areeda, supra, ¶ 351b1, at 284 (“In the movies cases, for example, the defendant’s conduct . . . depriv[ed] rival film producers, distributors, or exhibitors of adequate access to markets or supplies. The landlord is a stranger to those interests: the real estate market as a whole is not significantly affected.”).

10

Thus, and for the reasons ably expressed in Part II.A.2 of Judge Fuentes’ opinion, I agree that Hanover lacks antitrust standing with respect to what it calls the full-service supermarket shopping center market.

II. Noerr–Pennington and Remaining Issues

I agree with Judge Fuentes’ views on Noerr–Pennington and Village’s other objections to Hanover’s Complaint. Hence I join Part II.B–C of his opinion.

III. How to Decide This Case?

This case presents what academic literature terms a “voting paradox.” On the one hand, two judges (Judge Greenberg and I) believe that the outcome should be that Hanover’s suit not proceed, though we do so for different reasons. However, one majority of this Court (Judges Fuentes and Greenberg) believes that Hanover has antitrust standing (I do not because I do not discern antitrust injury), while another majority (Judge Fuentes and I) believes that Hanover should survive Village’s motion to dismiss (assuming it has antitrust standing). The paradox is that, if I vote on the judgment of this case (affirm or reverse) based on my individual views, a majority of the Court will have ruled against the prevailing party on each relevant issue, meaning that our Court’s reasoning would not support its judgment. However, if I follow, despite my dissent, Judge Fuentes and Greenberg on the antitrust standing issue, my individual vote would be inconsistent with my view of who should win were I alone ruling.

But to me it is significant that we are not acting alone. Because we need to act as a Court, I think it is more appropriate for me to be bound by the majority’s opinion on antitrust standing despite my disagreement with it. Before I

11

explain my choice in detail, I shall survey the current state of thinking on this issue.

A. Law and Scholarship on the Voting Paradox

Although I do not write on an entirely blank slate with respect to this issue, there is surprisingly little discussion in judicial opinions about how one ought to vote when facing such a paradox. Where a majority agrees on the bottom-line outcome in a case, shifting majorities with varied lines of reasoning are more common; these variable groups unquestionably describe the holdings of the relevant courts. See, e.g., United States v. Booker, 543 U.S. 220 (2005) (resolving whether there was a constitutional violation by one majority per Justice Stevens over Justice Breyer’s dissent but ordering remedy via a different majority per Justice Breyer over Justice Stevens’ dissent); Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 302 (3d Cir. 2014) (“Although a majority of the Court thus does not accept the District Court’s ruling that CBP did not have standing, this conclusion does not change our outcome in light of a different majority’s independent conclusion that the Court properly entered summary judgment against the plaintiffs.”); United States v. Aguila-Montes de Oca, 655 F.3d 915, 916 (9th Cir. 2011); O Centro Espirita Beneficiente Uniao Do Vegetal v. Ashcroft, 389 F.3d 973 (10th Cir. 2004) (en banc); United States v. Johnson, 256 F.3d 895, 897 (9th Cir. 2001) (en banc); Davis v. U.S. Steel Corp., 779 F.2d 209, 210 (4th Cir. 1985).

It is thus commonplace that majorities composed of different allotments of judges lay down the law, and it would seem to follow that a judge may vote on a judgment based on the relevant court’s legal conclusions even if the judge disagrees with the court’s resolution of a dispositive issue. However, it is quite rare that judges are actually faced with a voting paradox where it is debatable whether the proper result

12

is to vote according to the judge’s personal preference or to vote according to shifting majorities’ statements of the law. In three Supreme Court cases, justices have noted that their votes on the judgment were inconsistent with their individual views of the proper outcome of the case. Arizona v. Fulminante, 499 U.S. 279, 313 (1991) (Kennedy, J., concurring in the judgment); Pennsylvania v. Union Gas Co., 491 U.S. 1, 45 (1989) (White, J., concurring in the judgment in part and dissenting in part); United States v. Vuitch, 402 U.S. 62, 96 (1971) (Harlan, J., dissenting as to jurisdiction); id. at 97 (opinion of Blackmun, J.).

Fulminante and Vuitch are especially relevant. In the former case, the Arizona Supreme Court held that a confession was coerced and thus inadmissible. State v. Fulminante, 778 P.2d 602, 627 (Ariz. 1988), aff’d, 499 U.S. 279 (1991). In deciding whether to affirm or reverse, the U.S. Supreme Court faced three issues: (1) whether the defendant’s confession was coerced; (2) if so, whether harmless error analysis applied; and (3) if so, whether the admission of the confession was harmless error. Fulminante, 499 U.S. at 279, 282, 295. Five justices concluded the confession was coerced, id. at 287; a different group of five justices concluded harmless error applies to coerced confessions, id. at 311–12; and still a third group of five held that the admission there was not harmless, id. at 302. At the same time, five justices thought the Arizona Supreme Court should have been reversed, though for no consistent reason. See id. at 306 (opinion of Rehnquist, C.J., that confession was not coerced, joined by O’Connor, Kennedy & Souter, JJ.); id. at 312 (opinion of Rehnquist, C.J., joined by Scalia, J., that admission of confession was harmless). Justice Kennedy yielded to the majority on the question of whether the confession was coerced and thus reached the harmless-error issue; he concluded the admission was not harmless and thus supported the judgment affirming the Arizona Supreme

13

Court. Id. at 313–14. Likewise, in Vuitch Justices Harlan and Blackmun acceded to a majority’s disposition as to jurisdiction, but—together with other justices—formed a separate majority on the merits. 402 U.S. at 96, 97.3

Similarly, in the panel opinion of United States v. Andis, 277 F.3d 984, 985 (8th Cir. 2002), rev’d, 333 F.3d 886 (8th Cir. 2003) (en banc), two judges held that the right to

3 Union Gas is less squarely on point because no majority

supported that judgment on every point. The issues were (1)

whether two Congressional statutes were intended to abrogate

state sovereign immunity and (2) whether Congress had that

power under the Commerce Clause. 491 U.S. at 5. Five

justices held the statutes purported to annul state sovereign

immunity and five that Congress had the power to do so. Id.

at 13. However, only four justices agreed on a rationale for

Congress’s constitutional power. Justice White’s cryptic

concurrence stated on the constitutional question only that “I

agree with the conclusion reached by Justice Brennan in Part

III of his opinion, that Congress has the authority under

Article I to abrogate the Eleventh Amendment immunity of

the States, although I do not agree with much of his

reasoning.” Union Gas Co., 491 U.S. at 57 (White, J.,

concurring in the judgment in part and dissenting in part). It

was this absence of reasoning—not, as Judge Greenberg’s

dissent suggests, Justice White’s yielding to his colleagues on

the statutory interpretation question—that caused the

“confusion” noted in Seminole Tribe of Florida v. Florida,

517 U.S. 44, 64 (1996) (“Justice White, who provided the

fifth vote for the result, wrote separately in order to indicate

his disagreement with the plurality’s rationale.”).

14

appeal an illegal sentence could not be waived, but a different majority held that the sentence should be vacated. Two judges, acting independently, would have affirmed the sentence—one because he viewed the waiver as valid and another because he thought the sentence was legal. Id. However, the judge who viewed the waiver as valid voted to remand the case for further proceedings because on the merits, assuming the issue was not waived, he believed the sentence was illegal. Id. at 989 (Morris Sheppard Arnold, J., dissenting in part and concurring in the judgment). This vote was made without much comment except that “otherwise the court could not issue a mandate.” Id. (In fact, a mandate could have just as easily issued if the two judges preferring affirmance voted to affirm.) 4

At the same time, there have been cases where judges or justices stick to their individual guns with the result that, although a majority supports a given judgment, a careful reading of all the opinions in the case reveals that no majority supports the prevailing party on any issue logically necessary

4 There may also be some support for issue voting in our

decision in United States v. Bazzano, 712 F.2d 826 (3d Cir.

1983) (en banc) (per curiam). In that case, nine of the ten

judges would have voted to remand the case to the District

Court. But no majority could agree on what the District

Court should do on remand. Id. at 829 (noting that the

“differing grounds on which these various votes for remand

are rested cannot be reconciled so as to yield a majority vote

for a remand with consistent instructions to the district

court”). We thus affirmed the District Court’s judgment,

despite nine of the ten judges agreeing on the outcome,

because no majority could agree on rationale.

15

to its victory. For example, Miller v. Albright, 523 U.S. 420 (1998), presented four questions, and shifting majorities of the Supreme Court sided with Miller on each one; nonetheless six justices, for differing reasons, thought Miller should lose, which she did. Maxwell L. Stearns, Should Justices Ever Switch Votes? Miller v. Albright in Social Choice Perspective, 7 Sup. Ct. Econ. Rev. 87, 102 (1999). To muddy the waters further, scholars believe that in other cases justices or judges have cast votes in favor of analyses with which they did not agree in order to mask voting paradoxes. See, e.g., Michael Abramowicz & Maxwell L. Stearns, Beyond Counting Votes: The Political Economy of Bush v. Gore, 54 Vand. L. Rev. 1849, 1938–41 (2001).

Given this array of paradoxical (or potentially so) cases and the striking absence of analysis of how to vote in any of them, it is not surprising that there is no set rule on how an appellate judge should vote. Generally, scholars who analyze voting paradoxes (and there are several) discuss two possibilities: “issue voting” and “outcome voting.” Broadly speaking, the former occurs when a judge surveys the holding on each question of law presented; a majority vote on any given issue counts as a holding of the court, and the remaining judge is bound by it as if it occurred in a prior precedential case.5 The latter, and more common, scenario

5 This equation of precedent with an issue is problematic in a

court that has power to overrule its precedent, like the en banc

Third Circuit or the Supreme Court. Indeed, when a panel is

in a position to overrule prior precedent, a voting paradox

may be more likely. See David S. Cohen, The Precedent-

Based Voting Paradox, 90 B.U. L. Rev. 183, 184 (2010).

Luckily, that is not the case with a panel of this Court. See

Third Circuit I.O.P. 9.1 (“It is the tradition of this court that

16

occurs when a judge votes on the result of a case (affirm, vacate, reverse, etc.) according to his or her view of the proper outcome and without regard to the views of the other judges on a panel. Even if a careful reading of the judges’ opinions in a case shows that a majority would rule for the losing party on each relevant issue, an outcome-vote, as that term is usually used in the relevant literature, results in a win for the party the majority of judges think should win regardless of reasoning.

Before discussing the pros and cons of each voting protocol, I note that one thing is clear: as a formal matter, judges vote on the result of a case, i.e., whether to affirm, reverse, vacate, dismiss, remand, or some combination of these; otherwise, the clerk of a court could not enter judgment pursuant to Fed. R. App. P. 36. But even though “result” and “outcome” are synonyms, it does not follow that my vote on the disposition must be what I have just defined as an “outcome vote.” I am aware of no source of law that tells me whether my vote must be based on how I view our Court’s holding on each relevant issue or on how I personally view the best outcome of the case.

B. An Issue Vote is Preferable Here

There are two closely related reasons why I choose to vote by issue in this case, and I will discuss them in turn: (1) the execution of our dual responsibilities to resolve disputes and declare the law; and (2) the role of a judge on a multimember court.

the holding of a panel in a precedential opinion is binding on

subsequent panels. Thus, no subsequent panel overrules the

holding in a precedential opinion of a previous panel. Court

en banc consideration is required to do so.”).

17

1. Our Dual Responsibilities: Dispute Resolution and Law Declaration

Those who sit on, appear before, or study federal courts are familiar with the notion that we serve two primary functions: dispute resolution and law declaration. The former role is rooted in the limitation that courts only decide “cases” and “controversies.” U.S. Const., art. III, § 2. To carry out this role, a court issues judgments in the cases before it; in the case of an appellate court, the judgment, as noted, will usually be to affirm, reverse, vacate, dismiss, remand, or some combination thereof.

A court’s second role is “to say what the law is.” Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803). This role flows directly from the first. “Those who apply the rule to particular cases . . . must of necessity expound and interpret that rule.” Id. To fulfill its law-declaration function, a court often writes opinions explaining the law and reasoning underlying its judgments. See also Jonathan Remy Nash, A Context-Sensitive Voting Protocol Paradigm for Multimember Courts, 56 Stan. L. Rev. 75, 86–87 (2003) (“Courts function as arbiters of particular disputes between litigants. Those litigants are concerned with the outcome of the case as determined by the courts. But, in handing down decisions, courts serve another important role: They announce (or aid in the evolution and development of) generally applicable rules of law.”).

To me, issue voting better accomplishes both roles by deciding all necessary (including threshold) issues and proceeding from that point to explain what the law is and why. By voting on issues, a multimember court announces discrete holdings that can be applied in later cases.

There is thus an obvious reason to vote on a case’s

18

disposition based on the Court’s resolution of each relevant issue—to align rationale and outcome. A related reason to do so is that voting paradoxes often arise because of the operation of the final-judgment rule. Nash, supra, at 84-85. Because legal rulings are usually not appealable before final judgments in most jurisdictions, appeals are more likely to present multiple issues that can create paradoxes, whereas if we heard appeals piecemeal, far less opportunity for voting problems would arise. The final-judgment rule is sound because it supports efficient resolution of cases at little cost: claims of reversible error can be preserved and, as a general matter, the litigant who is right on the law will prevail.

But that is not true if we allow the final judgment rule to affect our substantive resolution of the issues in a case. Take this case. Imagine that the final-judgment rule did not apply, and Hanover prevailed on antitrust standing in the District Court. Village then appealed, and we affirmed (over my dissent). Then, on remand, Village prevailed on the Noerr–Pennington issue in the District Court, and Hanover appealed and won (over Judge Greenberg’s dissent). There would be no doubt in that case that Hanover would have properly won its appeals even though two judges thought at different phases of the litigation it should have lost, and no justification for the final-judgment rule requires a contrary bottom-line outcome in such a seriatim case. To generalize from that example, the final-judgment rule helps create the voting paradox without providing a satisfactory rationale for the usual practice of outcome voting, thus posing the question of why, other than habit, we typically vote by outcome.

Judge Greenberg points out that we could avoid the voting paradox if I didn’t bother to reach the Noerr–Pennington issue. If so, a majority would conclude that Hanover had standing, and then a majority would conclude that Hanover loses but without a majority supporting any

19

particular reason for its loss. This avoids the problem of an incoherent precedent but replaces it with no opinion to provide even the hint of a rationale. Arguably, no reasoning is an improvement over reasoning that contradicts a judgment, but, as Judge Greenberg notes, we never have to issue an opinion. We could just issue judgment orders without reasoning in every case and save everyone a lot of time and paper. In my view, we issue judgments accompanied by reasoned opinions because the rule of law ought neither to be nor appear to be arbitrary. It follows that judgments should be supported by reasoning, that the reasoning should actually support the outcome in a particular case, and that in this case I should yield to my colleagues on antitrust standing and vote on the Noerr-Pennington issue that follows.

2. A Multimember Court: Deliberative Body or so Many Noses to Count?

The possibilities of issue and outcome voting expose a tension between the independence of individual judges and our membership on multimember panels of multimember courts. As we are independent, it could be thought that a litigant is entitled to the sum of independent votes in its favor and that a judge should not change his or her vote out of deference to colleagues’ shared views. The widely (though not universally) accepted practice of writing separate opinions when a judge disagrees with another’s analysis supports this view of voting one’s views alone.

There are at least two reasons why appellate courts should be deemed to act as an entity reasoning through the case issue by issue rather than a collection of individual judges with a judgment reflecting a vote tally divorced from the reasoning of the majority of the court. The first is the nature of multimember appellate courts as collegial, and not

20

just redundant, enterprises. Kornhauser and Sager explain that redundant and collegial enterprises “aim to produce performances that could in principle represent the unenhanced effort of a single person, but to bring that performance closer to the ideal.” Lewis A. Kornhauser & Lawrence G. Sager, The One and the Many: Adjudication in Collegial Courts, 81 Calif. L. Rev. 1, 4 (1993). Redundant enterprises “rely on an external structure of multiple independent efforts.” Id. For example, in the case of gymnastics judges, “[e]ach judge ranks the performance before her without consulting her peers, and the rankings are aggregated by rule.” Id. By contrast, collegial bodies “are like team enterprises in that each participant must consider and respond to her colleagues as she performs her tasks. Collaboration and deliberation are the trademarks of collegial enterprise.” Id. “While interaction and exchange are irrelevant or even antithetical to redundant enterprises, they are crucial to collegial enterprises, and the product of a collegial enterprise often belongs to that enterprise in a uniquely collective way.” Id. at 4–5.

Appellate courts are collegial enterprises. Judges collaborate on and deliberate about cases and issues at all levels of the appeals process, from deciding whether to hold oral argument to conferencing to circulating opinions. At the end of the process a judgment of the Court typically emerges supported by an opinion. In some sense that product is akin to what a team produces. “Team enterprises do not merely multiply product or amplify effort: they transform the performance into something that only a group could have produced.” Id. at 3. Put another way, while an individual judge could do the job of an appellate court, the process of multimember panels produces a product that is typically better qualitatively than what an individual appellate judge

21

could do. The whole is greater than the sum of its parts.6

In some cases, then, outcome voting lessens the value of an appellate court’s deliberative process. If judges engage in issue voting, there are multiple deliberations and votes; that is, there are deliberations and votes on each issue. A judge is not effectively on the sideline for disagreeing with the majority on a threshold issue. Applying issue voting in this case, for example, I reach the Noerr–Pennington issue, even though I perceive no standing, because my individual view on the antitrust standing question is subsumed (despite my filing a dissent) into that of the panel; we act as a single deliberative body in a process that produces a judgment that depends on the majority’s reasoning (whatever the composition of that majority) at each step of the process. With outcome voting, by contrast, though judges deliberate on separate issues (unless they decide not to reach them), a judgment depends not on reasoning but a tallying of who should win were each judge to vote a result without reasons. There is, therefore, less of an opportunity for synthesis or transformation of each judge’s reasoning into the larger whole. This provides the answer to Judge Greenberg’s lack of “understand[ing] why the circumstance that we are all on the panel should lead to a different result than that which would be reached individually by a majority of the panel.” Greenberg Op. at 29. The result should be different because we sit on a panel.

Second, issue voting treats judges as interchangeable—the premise of the black robe and an assumption on which our legal system is based. In our case, for example, Hanover prevails because two out of three judges find antitrust standing for the plaintiff and two out of

6 This is not to say that judges should not dissent. In that

sense, courts are not fully team enterprises.

22

three judges find no immunity for the defendant. Voting by issue better reflects our role as members of a single deliberative body striving to craft a sensible corpus juris. As noted above, if we voted by outcome, the precedential value of this case would be unclear if the same set of facts came before us (or a district court) a second time. For a body like a court that has no means to enforce its mandate other than persuasion, it is of great concern that “in cases where the doctrinal paradox arises, judgment and reason are immediately and inexorably pulled apart, to the potential detriment of the orderly development of legal doctrine.” Kornhauser & Sager, supra, at 5.

C. Arguments to the Contrary are Not Persuasive.

Thoughtful proponents of an outcome-based voting protocol argue that it promotes principled (i.e., not strategic) identification of issues and, at least in some cases, also promotes principled resolution of those issues. See Abramowicz & Stearns, supra, at 56–58; John M. Rogers, “Issue Voting” by Multimember Appellate Courts: A Response to Some Radical Proposals, 49 Vand. L. Rev. 997, 1002 (1996); Maxwell L. Stearns, How Outcome Voting Promotes Principled Issue Identification: A Reply to Professor John Rogers and Others, 49 Vand. L. Rev. 1045, 1050 (1996). In short, these scholars argue that if appellate courts vote by issue, judges and litigants will have an incentive to identify and sequence legal issues in disingenuous ways to cobble together shifting majorities that will eventually support their favored positions. By contrast, if the only vote is on the outcome, each judge will present the issues in the case as he or she actually views them without regard to the potential gains from gamesmanship in framing

23

issues.7

There are a number of replies to this argument. First, professional norms of the bench and bar go a long way in preventing deceptive strategies in brief- and opinion-writing. Second, it is unclear to me that the resolution of issues in an outcome-vote is more principled than in an issue vote; indeed, a principal problem with outcome voting is that occasionally

7 Judge Greenberg also relies on an article by then-Professor

Rogers, who concluded that “over 150 Supreme Court cases

involving plurality majority opinions indicate that a justice

should not [aggregate votes by issue and therefore] defer to a

majority that disagrees on a dispositive issue.” John M.

Rogers, “I Vote This Way Because I’m Wrong”: The Supreme

Court Justice as Epimenides, 79 Ky. L.J. 439, 459 (1990–91).

But not one of that large number of cases actually purports to

say how a judge “should” vote. Moreover, by Judge Rogers’

own count, only between fourteen and sixteen cases involved

situations where the justices voted by outcome when an issue-

vote would have yielded a different result. Id. at 448 & n.24.

In light of the three cases where justices voted by issue and

the Supreme Court’s silence in all cases on whether issue- or

outcome-based voting is preferable, I do not see how we can

fairly understand the Court to have settled the question of the

proper voting protocol. Kornhauser & Sager, supra, at 57

(“Current appellate practice with regard to paradoxical cases

is in shambles. The Supreme Court, in particular, has been

unmindful of the existence of the paradox, even when

confronted with cases whose dispositions turn on the choice

of alternative voting protocols.”).

24

issues are left entirely unresolved. For example, Wedderburn v. I.N.S., 215 F.3d 795, 801 (7th Cir. 2000), applied Miller, 523 U.S. 420 (where, as noted above, majorities on every issue undermined the judgment), to reject a similar challenge to a different statute. In Wedderburn, the Court reasoned not by legal analysis but by prediction about the votes of individual justices. 215 F.3d at 801. Finally, each judge on a multimember panel always has to vote ultimately on the outcome of a case; what is debatable is whether that vote should be based on the way majorities of judges resolve individual issues or how the individual judge views the preferred outcome. In some cases, like this one, where all agree on what the issues are, each relevant one is dispositive, and they all arise in an agreed-on logical sequence, issue-voting strikes me as preferable. But I do not mean to promise that I will always vote by issue, and I do not mean to suggest that my colleagues should or must follow my lead. As we have seen, Supreme Court justices are inconsistent in their voting bases, and no source of law resolves the question of how to vote. And in some cases, especially capital ones, the practical implications of a judgment—life or death— may be more important than the choice of one voting protocol over another. See David Post & Steven C. Salop, Rowing Against the Tidewater: A Theory of Voting by Multijudge Panels, 80 Geo. L.J. 743, 761 (1992).

D. The Next Case: Toward a Voting Protocol Protocol

As we have seen, appellate judges have little to guide their discretion in choosing a voting protocol. This case prompts me to argue for one guidepost: when an appellant raises “arguments that would constitute independent appeals were interlocutory appeals permissible,” issue voting is preferable. Nash, supra, at 147–48.

25

Because in this case I view a coherent precedent from our Court as more valuable than a resolution in favor of the party I would have sided with were I deciding this case by myself, and because all agree the two issues presented here are easily separated, I concur with Judge Fuentes in a disposition that ultimately favors Hanover.

IV. Conclusion

Hanover should lack antitrust standing because it has not suffered antitrust injury within the meaning of the Supreme Court’s exposition of that term. However, I am outvoted on this issue, which sets the precedent for our Court and the predicate for addressing the remaining issue (Noerr–Pennington). It has divided my colleagues, and thus my vote is needed to resolve it. I agree with Judge Fuentes that Noerr–Pennington poses no bar to relief at this stage in the litigation. Although I would affirm the District Court on antitrust standing grounds, I yield to my colleagues’ resolution of that issue and vote to vacate and remand on the lack of a Noerr-Pennington defense to Village.

Re: Hanover 3201 Realty, LLC v. Village Supermarkets,

No. 14-4183

GREENBERG, Circuit Judge, dissenting.

I concur with and join in Sections I, the background

section, and II.A., the antitrust standing section, of Judge

Fuentes’s opinion. Thus, I agree with his conclusion in Section

II.A. that plaintiff, Hanover 3201 Realty, LLC (“3201 Realty”),

has antitrust standing in the full-service supermarket market but

not in the full-service supermarket rental space market. I cannot

agree, however, with Judge Fuentes’s opinion to the extent that I

believe it expands the sham exception to Noerr-Pennington

immunity. I decline to join in this aspect of Judge Fuentes’s

opinion because: (1) 3201 Realty has not properly preserved the

issue; (2) no court of which I am aware has applied the

expanded exception in circumstances comparable to those here;

and (3) the expansion of the sham exception comes with a

questionable pedigree. I therefore conclude that the legal

challenges to 3201 Realty’s development project that Village

Supermarkets, Inc. (“Village”) brought on behalf of itself and

Hanover and Horsehill Development LLC fall within the

antitrust immunity afforded to petitioning activity under the

Noerr-Pennington doctrine.1 In light of this conclusion and

Judge Ambro’s conclusion that 3201 Realty does not have

antitrust standing, two of the three members of this panel believe

that the District Court correctly dismissed the complaint.

In coming to my conclusion that the District Court

correctly dismissed the complaint I recognize that a majority of

1 I refer to Village and Hanover and Horsehill Development

LLC together as defendants.

2

the panel, Judge Fuentes and I, believe that the District Court in

part erred in concluding that 3201 Realty lacks antitrust

standing. But that error does not require us to reverse the

Court’s judgment because an appellate court may affirm an

order granting a motion to dismiss on “any ground supported by

the record.” Hildebrand v. Allegheny Cnty., 757 F.3d 99, 104

(3d Cir. 2014) (quoting Tourscher v. McCullough, 184 F.3d

236, 240 (3d Cir. 1999)), cert. denied, 135 S.Ct. 1398 (2015).

Here, the opinions of the members of the panel demonstrate that

a majority of the panel believe that there is such support in the

record because I accept defendants’ contention that the Noerr-

Pennington doctrine immunizes them from antitrust liability for

their allegedly anticompetitive judicial and administrative

challenges to 3201 Realty’s development project, and Judge

Ambro accepts defendants’ contention that 3201 Realty did not

have antitrust standing.2 Thus, I reiterate that Judge Ambro and

I believe that the District Court reached the correct result,

though in part on a basis that differs from that on which the

Court relied. Accordingly, though the panel is reversing, it

should be affirming.

I. THE NOERR-PENNINGTON DOCTRINE IMMUNIZES

2 Defendants raised this argument both in the District Court and

in their answering brief on appeal. 3201 Realty failed to address

the merits of the argument in its reply brief, but we afforded it

an opportunity to do so in a supplemental reply brief and it did

so.

3

DEFENDANTS’ CONDUCT FROM ANTRITRUST

LIABILITY.

A. Relevant Law

The Noerr-Pennington doctrine draws its name from the

Supreme Court’s opinions in Eastern Railroad Presidents

Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct.

523 (1961), and United Mine Workers of America v.

Pennington, 381 U.S. 657, 85 S.Ct. 1585 (1965). It derives in

part from the First Amendment right to petition the government.

Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.Ct.

1749, 1757 (2014); BE & K Constr. Co. v. NLRB., 536 U.S.

516, 524-25, 122 S.Ct. 2390, 2395-96 (2002). Under the

doctrine, petitioners for “government . . . redress are generally

immune from antitrust liability” when defending against

antitrust claims predicated on this petitioning activity. Prof’l

Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508

U.S. 49, 56, 113 S.Ct. 1920, 1926 (1993) (“PRE”); see A.D.

Bedell Wholesale Co. v. Philip Morris Inc., 263 F.3d 239, 250

(3d Cir. 2001). The doctrine applies not only to lobbying

activity but also “to efforts to influence administrative agency

action and efforts to access the court system.” Santana Prods.

Inc. v. Bobrick Washroom Equip., Inc., 401 F.3d 123, 131 n.13

(3d Cir. 2005) (citation omitted); see Cal. Motor Transp. Co. v.

Trucking Unlimited, 404 U.S. 508, 510, 92 S.Ct. 609, 611-12

(1972); Cheminor Drugs, Ltd. v. Ethyl Corp., 168 F.3d 119, 122

(3d Cir. 1999). Indeed, “[c]alling concerns about a proposed

development to the attention of the responsible state agencies

[and courts] lies at the core of privileged activity.” Herr v.

Pequea Twp., 274 F.3d 109, 121 (3d Cir. 2001).

4

3201 Realty argues that the Noerr-Pennington doctrine

does not immunize defendants for their conduct because the

allegedly anticompetitive legal challenges to the development

project fall within the so-called “sham” exception to the

doctrine. In PRE, the Supreme Court established a two-prong

test for determining the applicability of this exception including

both objective and subjective components. See 508 U.S. at 60-

61, 113 S.Ct. at 1928. Under the objective prong, the plaintiff

must show that the defendant’s petitioning was “objectively

baseless in the sense that no reasonable litigant could

realistically expect success on the merits.” BE & K Constr., 536

U.S. at 526, 122 S.Ct. at 2396 (quoting PRE, 508 U.S. at 60, 113

S.Ct. at 1928). A plaintiff cannot make this showing if the

defendant’s petitioning activity has succeeded as “a successful

‘effort to influence governmental action . . . certainly cannot be

characterized as a sham.’” PRE, 508 U.S. at 58, 113 S.Ct. at

1927 (alteration in original) (quoting Allied Tube & Conduit

Corp. v. Indian Head, Inc., 486 U.S. 492, 502, 108 S.Ct. 1931,

1938 (1988)).

On the other hand, even if a defendant’s petitioning

activity was unsuccessful, that failure does not prove that it did

not have an objective basis for the activity. See id. at 60 n.5,

113 S.Ct. at 1928 n.5; Herr, 274 F.3d at 119. Moreover, “even

when the law or the facts appear questionable or unfavorable at

the outset, a party may have an entirely reasonable ground for

bringing suit.” PRE, 508 U.S. at 60 n.5, 113 S.Ct. at 1928 n.5

(quoting Christiansburg Garment Co. v. EEOC, 434 U.S. 412,

422, 98 S.Ct. 694, 701 (1978)). The second, subjective prong

for establishing the sham exception to Noerr-Pennington

immunity, comes into play only if the plaintiff first makes a

5

showing satisfying the exception’s objective prong. See PRE,

508 U.S. at 60, 113 S.Ct. at 1928; Cheminor, 168 F.3d at 123

n.10. Accordingly, a defendant’s anticompetitive intent in

engaging in petitioning activity is immaterial if it had probable

cause for its activity. See PRE, 508 U.S. at 62, 113 S.Ct. at

1929.

In an effort to avoid the need to satisfy PRE’s threshold

objective prong, 3201 Realty contends that the PRE test applies

only where the defendants institute a single legal action and not

where, as here, the defendants brought multiple legal challenges

to the plaintiff’s enterprise. 3201 Realty supports this position

by pointing to cases from other courts of appeals holding that

“where the defendant is accused of bringing a whole series of

legal proceedings,” “the question is not whether any one of them

has merit -- some may turn out to, just as a matter of chance --

but whether they are brought pursuant to a policy of starting

legal proceedings without regard to the merits and for the

purpose of injuring a market rival.” USS-POSCO Indus. v.

Contra Costa Cnty. Bldg. & Constr. Trades Council, AFL-CIO,

31 F.3d 800, 811 (9th Cir. 1994); accord Waugh Chapel S., LLC

v. United Food & Commercial Workers Union Local 27, 728

F.3d 354, 363-64 (4th Cir. 2013); Primetime 24 Joint Venture v.

Nat’l Broad., Co., 219 F.3d 92, 101 (2d Cir. 2000).

Judge Ambro and Judge Fuentes accept 3201 Realty’s

argument circumventing the need to satisfy the objective prong

of the dual-prong PRE test. I believe, however, that the

argument should fail for at least three independent reasons.

First, 3201 Realty did not raise this argument until it filed its

supplemental reply brief in this Court. Beyond a mere “failure

to cite particular cases within its broader argument for the sham

6

exception,” majority typescript at 30 n.12, 3201 Realty

conceded before the District Court that it had to satisfy PRE’s

two-prong test and first show that any allegedly anticompetitive

“lawsuit or other petitioning activity [was] objectively baseless,”

Pl.’s Br. in Opp’n to Mot. to Dismiss at 9 (citing PRE, 508 U.S.

at 60, 113 S.Ct. at 1928). I therefore would hold that 3201

Realty has waived any argument excusing it from having to

establish that defendants’ actions were objectively baseless. See

Erdman v. Nationwide Ins. Co., 582 F.3d 500, 507 n.2 (3d Cir.

2009) (holding that plaintiff waived argument by conceding the

point at issue on the appeal in the district court and explaining

that her discovery of the argument upon “‘further reading’ while

preparing [her] appeal” did not justify overlooking the waiver);

Bryant v. Military Dep’t of Miss., 597 F.3d 678, 694 (5th Cir.

2010) (holding that by not raising it before the district court,

plaintiff waived the argument that “the ‘objectively baseless’

standard ought to be applied in some different, and presumably

favorable way in this case because multiple lawsuits were filed

against him”).

Second, even putting aside the waiver problem, the very

case law applying the alternative test for which 3201 Realty

advocates, i.e., not applying the PRE two-prong test which

includes an objective component in situations in which a

defendant has instituted a series of legal actions, demonstrates

that the single lawsuit and three administrative challenges that

defendants initiated do not rise to the level of “a whole series of

legal proceedings” so as to trigger the applicability of the

alternative test. See In re Flonase Antitrust Litig., 795 F. Supp.

2d 300, 309 n.10 (E.D. Pa. 2011) (“No court has applied the

USS-POSCO test to a ‘series’ of five petitions . . . .”); see also

7

ERBE Elektromedizin GmbH v. Canady Tech. LLC, 629 F.3d

1278, 1291-92 (Fed. Cir. 2010) (even assuming alternative test

applied, no “series” based on defendant filing three lawsuits);

Amarel v. Connell, 102 F.3d 1494, 1519 (9th Cir. 1996) (no

“series” where defendants initiated two lawsuits and

administrative proceedings); Ludwig v. Superior Court, 43 Cal.

Rptr. 2d 350, 365 n.33 (Ct. App. 1995) (“[A] total of four

activities, two of which are not meritless as a matter of law,

cannot constitute such a pattern [of baseless opposition].”).

Thus, while Judge Ambro and Judge Fuentes adopt the test of

other courts of appeals limiting this application of PRE, it seems

to me that they do not correctly apply the case law based on that

test, declaring instead that in the present circumstances, though

not in others, four actions qualify as a “series.”3 Majority

typescript at 33-34. In reality, the four legal challenges that

defendants initiated pale in comparison to the 29 in USS-

POSCO, 31 F.3d at 811; the 14 in Waugh Chapel, 728 F.3d at

365; and the thousands in Primetime 24, 219 F.3d at 101.

Third, even overlooking both 3201 Realty’s waiver of a

challenge to the applicability of the two-prong PRE test and the

consideration that the courts that have adopted the alternative

intent-based test would not apply it in the circumstances we

face, I harbor doubts about whether the courts limiting the

applicability of PRE have identified a proper exception to that

case’s two-part test. This purported exception rests on a case on

which Judge Ambro and Judge Fuentes heavily rely decided

3 As I explain below there now is an additional case that Village

has initiated to consider. See infra note 5. But the addition of

this case does not change my conclusion.

8

prior to PRE in which the Supreme Court explained: “One

claim, which a court or agency may think baseless, may go

unnoticed; but a pattern of baseless, repetitive claims may

emerge which leads the factfinder to conclude that the

administrative and judicial processes have been abused.” Cal.

Motor Transp., 404 U.S. at 513, 92 S.Ct. at 613. Yet it seems to

me that the Court’s reference to “a pattern of baseless, repetitive

claims” makes clear that this language comes into play only

where a plaintiff first can satisfy what ultimately became PRE’s

first prong; otherwise, the Court’s use of the word “baseless”

would serve no purpose. But the use of “baseless” did serve a

purpose because the Court in PRE pointed to this very language

as demonstrating that “[n]othing in California Motor Transport

retreated” from “an indispensable objective component” in

establishing the sham exception. 508 U.S. at 58, 113 S.Ct. at

1927.

In a ruling employing the understanding of PRE that I

think is appropriate, we applied the objective prong to uphold a

claim of Noerr-Pennington immunity in a case similar to this

one where the defendants challenged a plaintiff’s land

development project in multiple judicial and administrative

proceedings. See Herr, 274 F.3d at 115-16, 118-19. Other

courts also have rejected the proposed exception to the PRE test

advanced here that would dispense with the need to show that

the defendant’s activity lacked an objectively reasonable basis.

See Travelers Express Co. v. Am. Express Integrated Payment

Sys. Inc., 80 F. Supp. 2d 1033, 1042 (D. Minn. 1999) (applying

PRE rather than Court of Appeals for the Ninth Circuit’s test

even though defendant filed “a series of allegedly meritless

suits”); Christian Mem’l Cultural Ctr., Inc. v. Mich. Funeral

9

Dirs. Ass’n, 998 F. Supp. 772, 777 n.2 (E.D. Mich. 1998)

(“[T]he courts in this circuit that have confronted similar issues

[of whether an exception to PRE exists where the defendant

initiated multiple lawsuits] have declined to read [PRE] so

narrowly.” (citation omitted)).

I appreciate the animating concern of other courts of

appeals that an antitrust defendant’s fortuitous success in a small

number of lawsuits should not automatically immunize the

defendant from the antitrust consequences of initiating a whole

series of anticompetitive legal challenges. See Waugh Chapel,

728 F.3d at 365; Primetime 24, 219 F.3d at 101; USS-POSCO,

31 F.3d at 811. But we should not alleviate this concern by

excusing a plaintiff from having to show the objective

baselessness of even a single action brought by the defendant.

After all, if Noerr-Pennington immunity shields objectively

reasonable actions when considered individually, it should

continue to shield them when they are aggregated. Cf.

Pennington, 381 U.S. at 670, 85 S.Ct. at 1593 (holding that

immunity extends to petitioning conduct “either standing alone

or as part of a broader scheme”).

Judge Ambro and Judge Fuentes reason that the

alternative test makes more sense when dealing with multiple

legal challenges because having a larger sample of challenges

than a single challenge enables the court to better “assess

whether a defendant has misused the governmental process to

curtail competition.” Majority typescript at 32. Yet this

approach treats PRE’s objective prong as more akin to an

evidentiary rule of thumb for determining whether the defendant

possessed an anticompetitive purpose, rather than the

independent and threshold requirement that it unmistakably

10

represents. See 508 U.S. at 57, 113 S.Ct. at 1926 (“[A]n

objectively reasonable effort to litigate cannot be sham

regardless of subjective intent.”); id. at 59-60; 113 S.Ct. at 1928

(“We [earlier] dispelled the notion that an antitrust plaintiff

could prove a sham merely by showing that its competitor’s

‘purposes were to delay [the plaintiff’s] entry into the market

and even to deny it a meaningful access to the appropriate . . .

administrative and legislative fora.’” (second and third

alterations in original) (quoting Columbia v. Omni Outdoor

Adver., Inc., 499 U.S. 365, 381, 111 S.Ct. 1344, 1354 (1991)).

Perhaps for this reason, some courts applying an approach

similar to that of Judge Ambro and Judge Fuentes have

preserved the need for showing the objective baselessness of the

defendant’s action as a prerequisite for establishing the sham

exception. See, e.g., In re Terazosin Hydrochloride Antitrust

Litig., 335 F. Supp. 2d 1336, 1367 (S.D. Fla. 2004) (rejecting

claim of sham litigation because “none of the lawsuits,

individually, can be considered objectively baseless”); Gen-

Probe, Inc. v. Amoco Corp., 926 F. Supp. 948, 959 (S.D. Cal.

1996) (“[U]nder either the PRE or the USS-POSCO test, [the

plaintiff’s] claims against [the defendants] must demonstrate

objective baselessness.”).

When I consider these questions regarding the legal

support for abandoning a threshold objective baselessness

requirement, I cannot acquiesce in the adoption of a test where

the argument supporting the adoption has not been advanced

properly and the test is being applied in circumstances beyond

those recognized by other courts that have adopted the test

abandoning the objective component of PRE. I therefore would

hold that 3201 Realty cannot circumvent a Noerr-Pennington

11

immunity defense without first showing that defendants’ legal

challenges were objectively baseless.4

4 I agree with Judge Ambro and Judge Fuentes that the

circumstance that some of defendants’ legal actions are ongoing

does not preclude application of the sham exception, although I

do so based on Supreme Court precedent and not based on the

“prospective” character of the alternative test. Majority

typescript at 37 n.14. In Vendo Co. v. Lektro-Vend Corp., 433

U.S. 623, 97 S.Ct. 2881 (1977), the Court faced the question of

whether a district court could enjoin an ongoing state court

proceeding that allegedly violated federal antitrust law. The

Court fractured into three opinions, none of which obtained a

majority. See id. at 626, 97 S.Ct. at 2885 (plurality opinion of

Rehnquist, J.); id. at 643, 97 S.Ct. at 2893 (Blackmun, J.,

concurring in result); id. at 645, 97 S.Ct. at 2894 (Stevens, J.,

dissenting). Nevertheless, although a majority of the Court

concluded that the Anti-Injunction Act barred the district court

from enjoining the state court proceeding at issue, all nine

justices either explicitly or implicitly acknowledged that

plaintiffs can seek some form of relief, such as damages or

injunctions against future legal actions, based on ongoing sham

proceedings brought in violation of the antitrust laws. See id. at

635 n.6, 637 n.8, 97 S.Ct. at 2889 n.6, 2890 n.8 (plurality

opinion of Rehnquist, J.); id. at 644, 97 S.Ct. at 2894

(Blackmun, J., concurring in result); id. at 653-54, 97 S.Ct. at

2899 (Stevens, J., dissenting). Indeed, six of the justices

declared that, in appropriate circumstances, such antitrust relief

could include an injunction against the ongoing sham

proceedings themselves. See id. at 644, 97 S.Ct. at 2894

(Blackmun, J., concurring in result); id. at 654, 660, 97 S.Ct. at

12

B. Application of PRE to Present Case

I now turn to the question of whether 3201 Realty can

show that defendants’ activities were objectively baseless. I

initially point out that 3201 Realty arguably has waived this

issue, which is distinct from the question of whether to apply the

alternative test that does not require objective baselessness, by

not adequately arguing it on appeal. 3201 Realty’s

supplemental reply brief starts from the premise that the

alternative test to PRE applies but does not assert that

defendants’ legal challenges lacked an objectively reasonable

basis, and only briefly suggests that defendants did not have

standing to bring these challenges or that the challenges

otherwise lacked merit. See, e.g., John Wyeth & Bro. Ltd. v.

CIGNA Int’l Corp., 119 F.3d 1070, 1076 n.6 (3d Cir. 1997)

2899, 2902 (Stevens, J., dissenting). Subsequently, in a case

arising under federal labor law, the Court drew on the sham

exception to Noerr-Pennington to hold that an ongoing baseless

lawsuit may be enjoined if it was brought for an improper

purpose. See Bill Johnson’s Rests., Inc. v. NLRB, 461 U.S.

731, 744, 103 S.Ct. 2161, 2170 (1983).

These Supreme Court cases illustrate that a plaintiff can

bring an antitrust claim circumventing Noerr-Pennington

immunity by relying on the sham exception even if the allegedly

sham legal actions remain pending. This conclusion is logical

given that a determination of whether anticompetitive legal

actions fall within the sham exception turns not on their ultimate

outcomes but on the existence of a reasonable basis (or a proper

motive) for instituting and pursuing them in the first place. See

PRE, 508 U.S. at 60 n.5, 113 S.Ct. at 1928 n.5.

13

(“[A]rguments raised in passing . . . , but not squarely argued,

are considered waived.”). Nevertheless, I will give 3201 Realty

the benefit of the doubt and consider the arguments that

defendants’ actions were objectively baselessness to which it

alluded in its supplemental reply brief. 3201 Realty simply

cannot meet the objective baselessness standard that PRE

recognized.

Where the complaint fails at least to raise a question of

fact on a sham petitioning issue, a court may reject the claim by

granting a motion to dismiss. See PRE, 508 U.S. at 63, 113

S.Ct. at 1930 (“Where, as here, there is no dispute over the

predicate facts of the underlying legal proceeding, a court may

decide probable cause as a matter of law.”); A.D. Bedell, 263

F.3d at 241 (affirming dismissal under Fed. R. Civ. P. 12(b)(6)

of antitrust claims based on Noerr-Pennington doctrine).

In arguing that defendants’ legal challenges were

objectively baseless, 3201 Realty primarily contends that they

lacked standing when they made these challenges. For support,

3201 Realty points to the decisions of the New Jersey Superior

Court and the New Jersey Department of Environmental

Protection (“NJDEP”) respectively concluding that Village

lacked standing in its prerogative writs action and flood hazard

area (“FHA”) permit challenges. But as I already have noted,

the ultimate failure of an underlying action does not establish its

objective baselessness. See PRE, 508 U.S. at 60 n.5, 113 S.Ct.

at 1928 n.5 (“[W]hen the antitrust defendant has lost the

underlying litigation, a court must ‘resist the understandable

temptation to engage in post hoc reasoning by concluding’ that

an ultimately unsuccessful ‘action must have been unreasonable

or without foundation.’” (quoting Christiansburg, 434 U.S. at

14

421-22, 98 S.Ct. at 700)); Herr, 274 F.3d at 119 (rejecting

plaintiff’s claim of sham litigation where opinions in underlying

actions demonstrated that courts analyzed relevant issues “with

care and some detail” and did not consider them “frivolous”);

Balt. Scrap Corp. v. David J. Joseph Co., 237 F.3d 394, 400 (4th

Cir. 2001) (rejecting antitrust plaintiff’s claim of sham litigation

notwithstanding that state court had dismissed underlying suit

for lack of standing).

3201 Realty has not shown that a reasonable litigant in

Village’s position would have perceived that it did not have a

realistic possibility of establishing standing in the relevant

actions. To the contrary, the New Jersey Superior Court’s

decision in the prerogative writs action demonstrates that a

reasonable litigant could have perceived such a possibility in

that case. In particular, Village cited several cases before that

court in support of its claim that it had standing based on its

status as a local taxpayer. For example, the court had stated in

one of those cases that “[t]here is some support for the

proposition that any local taxpayer has standing to object to a

variance application, although the question has not clearly been

resolved.” Vill. Supermarket, Inc. v. Mayfair Supermarkets,

Inc., 634 A.2d 1381, 1385 (N.J. Super. Ct. Law Div. 1993)

(citing Booth v. Bd. of Adjustment of Rockaway Twp., 234

A.2d 681, 682 (N.J. 1967)). The Superior Court ultimately

decided this issue against Village, but “[i]n light of the unsettled

condition of the law,” Village had a reasonable basis for its

position. PRE, 508 U.S. at 65, 113 S.Ct. at 1930.

Similarly, in the FHA permit challenge, Village argued

that its expected loss of business as a direct competitor of the

proposed supermarket qualified as a sufficiently particularized

15

property interest to establish standing. But I need look no

further than the discussion of antitrust standing in Judge

Fuentes’s opinion to see that status as a direct competitor

sometimes can demonstrate a unique property interest in filing a

legal challenge. See, e.g., majority typescript at 26 (“Antitrust

injury ordinarily is limited to consumers and competitors in the

restrained market.”). Although the NJDEP ultimately decided to

treat Village’s business interests as equivalent to other

generalized interests that do not support standing, the cases on

which it relied did not involve challenges brought by

competitors and therefore did not foreclose Village’s argument.

Village therefore had a reasonable basis for its position in this

action as well. See id., 113 S.Ct. at 1931 (“Even in the absence

of supporting authority, [the antitrust defendant] would have

been entitled to press a novel . . . claim as long as a similarly

situated reasonable litigant could have perceived some

likelihood of success.”).

Furthermore, 3201 Realty has not demonstrated that

Village’s argument for standing in its wetlands permit challenge

was any weaker than the foregoing arguments for standing.

Finally, as to the major street intersection (“MSI”) permit

challenge, the New Jersey Department of Transportation

(“NJDOT”) affirmatively acknowledged Village’s standing to

raise its objections, noting that the department was “required to

consider any relevant data, analysis, and arguments submitted

by third parties in reaching its decisions concerning the approval

of access permits.” J.A. 165. I therefore reject 3201 Realty’s

argument that defendants’ legal challenges should be regarded

as objectively baseless because defendants lacked standing to

make the challenges. See Balt. Scrap Corp., 237 F.3d at 400;

16

Liberty Lake Invs., Inc. v. Magnuson, 12 F.3d 155, 157 (9th Cir.

1993).

Nor has 3201 Realty demonstrated that defendants’

challenges were objectively baseless on their merits. Indeed, the

relevant adjudicators upheld some of Village’s objections in two

of these challenges. In the MSI permit challenge, the NJDOT

agreed with Village that a prior development agreement required

3201 Realty either to construct certain highway improvements

or negotiate a new agreement before it could proceed with its

project. Likewise, in the wetlands permit challenge, the NJDEP

first “required” 3201 Realty to re-notice its application due to a

defect that Village identified in the original application. J.A.

169. Then, based on another objection raised by Village, the

NJDEP required 3201 Realty to conduct a wildlife survey for

the presence of an endangered species of bats before beginning

work on the property. Although Village did not prevail in its

other two challenges, the Superior Court’s and the NJDEP’s

opinions in those proceedings each addressed Village’s

contentions “with care and some detail” and without indicating

that those reviewing bodies considered Village’s positions

“frivolous.” See Herr, 274 F.3d at 119.

In these circumstances, 3201 Realty has not shown that

defendants’ petitioning activity was objectively baseless.

Defendants’ conduct therefore falls within the immunity

afforded by the Noerr-Pennington doctrine, and 3201 Realty’s

antitrust claims must fail. Therefore, we should affirm the

District Court’s order dismissing the complaint. Inasmuch as I

have reached this conclusion, I do not address the other

arguments that defendants raise in support of the District Court’s

17

order dismissing the complaint.5

II. JUDGE AMBRO’S AND MY AGREEMENT THAT THE

DISTRICT COURT ENTERED THE CORRECT JUDGMENT

MANDATES AN AFFIRMANCE.

As I stated at the outset of this opinion, Judge Ambro and

I agree that the District Court correctly dismissed the complaint.

Judge Ambro reaches this conclusion because he believes that

3201 Realty did not have the antitrust standing necessary to

bring this action, and I do so because I believe that defendants

were immune under the Noerr-Pennington doctrine. A

reasonable observer might think it is obvious that the

inescapable consequence of this agreement is that we must

affirm the District Court’s judgment dismissing the complaint.

But Judge Ambro avoids this outcome by regarding himself as

“bound by the majority’s [Judge Fuentes’s and Judge

Greenberg’s] opinion on antitrust standing despite [his]

disagreement with it,” Ambro typescript at 11, an application of

the principle of stare decisis. He therefore effectively switches

5 On September 10, 2015, 3201 Realty’s attorneys filed a letter

with attachments pursuant to Fed. R. App. P. 28(j) indicating

that Village’s chief operating officer on August 12, 2015, filed a

complaint in the Superior Court of New Jersey seeking an

injunction stopping the clearing work on 3201 Realty’s property

on the ground that 3201 Realty obtained its wetland permit by

fraud. To the best of my knowledge this case has not been

resolved so I do not take it into account as I do not know if the

suit is objectively baseless.

18

what should be his vote from an affirmance of the Court’s order

to a reversal. As a result a majority of the panel consisting of

Judge Fuentes and Judge Ambro announce the Court’s judgment

based on the following shifting majorities as to individual

issues: (1) Judge Fuentes’s and my view that 3201 Realty has

antitrust standing and (2) Judge Fuentes’s and Judge Ambro’s

view that 3201 Realty’s complaint overcomes a Noerr-

Pennington defense. I regard it as ironical that even though I

believe we should affirm the judgment of the District Court, my

view on an issue on which I would not decide the case is a factor

leading to its reversal. Indeed, if I only stated my views on the

Noerr-Pennington issue, then for certain we would be affirming

because Judge Ambro surely would not have seen himself as

bound by Judge Fuentes’s views if they stood alone. But I took

a position on standing because courts usually if not always

decide whether a plaintiff has standing before they consider the

merits of a case.

Although it is not my place to tell Judge Ambro how and

on what issues to vote, I write here to express my view that a

multimember panel should reach the result that follows from the

independent views of its members. Judge Ambro’s willingness

to be bound by the Fuentes-Greenberg majority’s position on

antitrust standing trumps his own conclusion on the standing

issue and runs counter to the longstanding and widespread

practice of the federal courts of appeals of counting judges’

views as to outcome and not as to individual issues. Although

some scholars have criticized this prevailing practice, critics and

proponents alike acknowledge its acceptance among the courts.

See David S. Cohen, The Precedent-Based Voting Paradox, 90

B.U. L. Rev. 183, 222 (2010) (“[T]he [Supreme] Court currently

19

uses outcome voting to reach a result, as it votes on the outcome

and then the Justices write their opinions to support the

outcome.”); Lewis A. Kornhauser & Lawrence G. Sager, The

One and the Many: Adjudication in Collegial Courts, 81 Cal. L.

Rev. 1, 31 (1993) (“[T]he case-by-case protocol has been the

encompassing norm of the Court throughout its existence.”);

Jonathan Remy Nash, A Context-Sensitive Voting Protocol

Paradigm for Multimember Courts, 56 Stan. L. Rev. 75, 86

(2003) (“[T]he standard voting protocol is generally to

determine the ultimate outcome in a case . . . based upon each

judge’s views as to the outcome in the case.”); David Post &

Steven C. Salop, Rowing Against the Tidewater: A Theory of

Voting by Multijudge Panels, 80 Geo. L.J. 743, 750 (1992) (“It

is clear that courts most frequently utilize outcome-voting.”);

John M. Rogers, “Issue Voting” by Multimember Appellate

Courts: A Response to Some Radical Proposals, 49 Vand. L.

Rev. 997, 998 (1996) (“[T]he overwhelming practice of the

justices on the Court has been to vote for the consequence of the

individual justice’s own reasoning.”); Maxwell L. Stearns,

Standing and Social Choice: Historical Evidence, 144 U. Pa. L.

Rev. 309, 313-14 (1995) (“Within particular cases, the Court --

along with virtually all appellate courts -- employs case-by-case,

rather than issue-by-issue, decisionmaking.”).

This practice of outcome voting comports with the

general primacy that our law affords to judgments over

opinions. See Jennings v. Stephens, 135 S.Ct. 793, 799 (2015);

Edward A. Hartnett, A Matter of Judgment, Not a Matter of

Opinion, 74 N.Y.U. L. Rev. 123, 127-34 (1999). It is well

established that we review a district court’s judgment, not its

opinion. See Jennings, 135 S.Ct. at 799; Blunt v. Lower Merion

20

Sch. Dist., 767 F.3d 247, 303 n.73 (3d Cir. 2014), cert. denied,

135 S.Ct. 1738 (2015). Just as this principle requires us to

affirm a district court’s judgment even if that court’s reasoning

differs from our own, it also should lead us to affirm even if our

respective grounds for doing so diverge. See Blunt, 767 F.3d at

303 n.73 (affirming district court’s order even though only

Judge Greenberg agreed with that court’s rationale because

Judge Ambro reached same disposition on other grounds).

In view of the primacy of judgments over opinions, we

may enter judgments without even issuing opinions. See, e.g.,

Quaciari v. Allstate Ins. Co., 172 F.3d 860 (3d Cir. 1998);

Hoover v. Watson, 74 F.3d 1226 (3d Cir. 1995); see also Fed. R.

App. P. 36. In fact, until some years ago this Court regularly

disposed of appeals by issuing judgment orders without

accompanying opinions, sometimes even in complex cases.

Indeed, our internal operating procedures still authorize the use

of judgment orders to announce the outcome of a case though

the practice of using judgment orders has fallen into disuse. 3d

Cir. I.O.P. 6.1. And in cases that do result in the issuance of

opinions, both the Supreme Court and this Court issue the

judgment supported by the independent views of a majority of

the judges even if a majority does not coalesce around a single

rationale. See, e.g., Kerry v. Din, 135 S.Ct. 2128, 2131 (2015)

(plurality opinion); United States v. Dupree, 617 F.3d 724, 726

(3d Cir. 2010); Cruz v. Chesapeake Shipping, Inc., 932 F.2d

218, 220 (3d Cir. 1991) (Rosenn, J., announcing the judgment of

the court); cf. Michael v. Horn, 459 F.3d 411, 429 n.18 (3d Cir.

2006) (Greenberg, J., concurring) (“[I]t is always true that even

though judges agree on the appropriate outcome of a case, they

would not write identical opinions.”). “That the court is able to

21

issue any judgment at all in such cases clearly demonstrates that

outcome-voting has been utilized.” Post & Salop, Rowing

Against the Tidewater, supra, at 750. Accordingly, “the

outcome of a case in a multimember court depends on the tally

of votes concerning the judgment even if the tally of votes

concerning each issue resolved by opinion would logically

produce a different conclusion.” Hartnett, supra, at 134.

Judge Ambro declines to follow this accepted practice of

independent outcome voting because of the “voting paradox”

that arises if issue-by-issue resolution of a case would lead to a

conclusion that is opposite to that reached based on outcome

voting. But in the absence of the voting paradox it would not

matter if a court decided a case on an issue-by-issue or outcome

basis. Moreover, the Supreme Court repeatedly and consistently

has utilized outcome voting even in cases implicating the voting

paradox. See, e.g., Miller v. Albright, 523 U.S. 420, 118 S.Ct.

1428 (1998); Am. Trucking Ass’ns, Inc. v. Smith, 496 U.S. 167,

110 S.Ct. 2323 (1990); Nat’l Mut. Ins. Co. of D.C. v. Tidewater

Transfer Co., 337 U.S. 582, 69 S.Ct. 1173 (1949); see also

Cohen, supra, at 183-84 (noting existence of more than 30 such

cases in Supreme Court history). Moreover, as Judge (then

Professor) Rogers has pointed out “[O]ver 150 Supreme Court

cases involving plurality majority opinions indicate that a justice

should not [aggregate votes by issue and therefore] defer to a

majority that disagrees on a dispositive issue.” John M. Rogers,

“I Vote This Way Because I’m Wrong”: The Supreme Court

Justice as Epimenides, 79 Ky. L.J. 439, 459 (1990-91).

So far as I can ascertain the only support in Supreme

Court cases for Judge Ambro’s vote which leads to a result on a

controlling issue in the case different from that which should

22

follow from his view of the case comes from three cases in

which justices deferred to a majority on an issue that they would

have resolved differently and therefore provided the decisive

vote or votes in favor of a judgment that contradicted their own

reasoning. See Arizona v. Fulminante, 499 U.S. 279, 313-14,

111 S.Ct. 1246, 1267 (1991) (Kennedy, J., concurring in the

judgment); Pennsylvania v. Union Gas Co., 491 U.S. 1, 56-57,

109 S.Ct. 2273, 2295-96 (1989) (White, J., concurring in the

judgment in part and dissenting in part); United States v. Vuitch,

402 U.S. 62, 96, 91 S.Ct. 1294, 1311 (1971) (Harlan, J.,

dissenting); id. at 97-98, 91 S.Ct. at 1312 (separate opinion of

Blackmun, J.). Significantly, each of the other justices in these

cases maintained the normal practice of voting for the judgment

supported by the justice’s own reasoning. See Hartnett, supra, at

137; Kornhauser & Sager, supra, at 18-19, 24. Moreover, the

justices who gave the “structurally aberrant” votes did not offer

any explanation for their divergence from accepted practice.

Kornhauser & Sager, supra, at 2; see Nash, supra, at 84 (noting

that judges who have employed issue-based voting have “simply

do[ne] so by fiat”); Rogers, “Issue Voting”, supra, at 998

(“There was no tenable justification given for the anomalous

votes in each case . . . .”). These few deviations, “supported by

simple ipse dixit, are pretty meager authority compared to the

overwhelming precedent against” the majority’s approach.

Rogers, “I Vote This Way Because I’m Wrong”, supra, at 463.

Judge Ambro explains his use of issue voting and his

consequent vote that results in an outcome that as an individual

judge he rejects as a consequence of Judge Fuentes’s and my

view on “the scope of the law of antitrust standing [which is]

now the law of this Circuit . . . I am obliged to consider the

23

merits of [3201 Realty’s] suit.” Id. at 1. Thus, to Judge Ambro

the principal of stare decisis applied on an internal basis within a

case controls the outcome of this appeal even though he does not

use the term stare decisis in explaining his view of how to

decide the case. I believe, however, that this reasoning is

incorrect. To start, at the time that Judge Ambro wrote these

words, and even now, the panel had not yet filed an opinion in

this case, so Judge Fuentes’s opinion cannot be the law of this

Circuit. This point cannot be dismissed as a mere timing

technicality because the draft opinion must be circulated to all

the active judges of the Court who then have an opportunity to

vote for initial en banc consideration of the case before the

opinion is filed. 3d Cir. I.O.P. 5.5.

Nor does Judge Ambro’s decision to defer in this case to

a majority’s view on the standing issue present an apt analogy to

the application of the principle of stare decisis. Deferring to a

majority resolution of an issue within the same case does not

serve the policies underlying stare decisis, including the

protection of individuals’ reliance on earlier cases, the need to

maintain consistency with earlier cases, the judicial efficiency of

not revisiting issues that already have been decided, and the idea

that the collective wisdom of courts over the years should

supersede the limited insights of a court hearing a single case.

See Rogers, “I Vote This Way Because I’m Wrong”, supra, at

463-65. Furthermore, if a judge had an obligation to follow a

panel majority’s conclusion there never should be a dissent.

Yet as discussed, rather than following a rule of

deference to a majority within the same case, judges nearly

invariably vote for the result supported by their individual

reasoning, whether the case involves a voting paradox or not. It

24

is obvious that each instance in which a judge dissents reflects

an example of a judge declining to defer to a majority view.

Accordingly, Judge Ambro’s use of the principle of stare decisis

to support his vote runs “contrary to the overwhelming weight

of precedent.” Rogers, “I Vote This Way Because I’m Wrong”,

supra, at 440. Such rare and selective deference constitutes little

deference at all, let alone a proper analogue to the rule of stare

decisis, which serves very different purposes.

I recognize that in voting-paradox cases, outcome voting

does produce an apparently odd result when compared with the

outcome that results when a case is decided on the basis of the

judges’ individual reasoning regarding each underlying issue.

But, contrary to Judge Ambro’s suggestion, outcome voting

does not render the precedential value of such cases “unclear.”

Ambro typescript at 22.

Outcoming voting in this case would yield the following

straightforward body of law for district courts in this Circuit to

apply: (1) if a case arises that only implicates the standing issue,

then, if the facts of that case cannot be distinguished from those

here, the court should hold that the plaintiff has antitrust

standing based on Judge Fuentes’s and my resolution of that

issue; (2) if a case arises that implicates the Noerr-Pennington

issue in a situation that factually cannot be distinguished from

that in this case, the court should hold that the defendant lacks

such immunity based on Judge Fuentes’s and Judge Ambro’s

resolution of that issue; but (3) if a case arises presenting both

issues, then, again, if the facts of that case cannot be

distinguished from the facts here, the court should dismiss the

case. See, e.g., Greene v. Teffeteller, 90 F. Supp. 387, 388

(E.D. Tenn. 1950) (applying Supreme Court case that involved

25

voting paradox and emphasizing that “precedent is established

by the votes of the justices, not by the reasons given for their

votes.”). Although no judge would reach all of these three

conclusions if acting alone, district courts could apply this

tripartite rule both “easily” and “consistently.” Rogers, “Issue

Voting”, supra, at 1013. Hence, outcome voting would produce

“clear” guidance to district courts. Id. at 1009.

Moreover, issue voting does not offer a panacea to the

problem of voting paradoxes. Rather, issue voting raises its own

set of potential difficulties, including indeterminacy in how to

identify the relevant issues, the prospect of a judge strategically

flipping the judgment by dividing an issue into deeper sub-

issues where a majority of the judges agree as to the meta-issue

but not as to the sub-issues, the possible inability of the court to

issue a judgment due to cycling in how a majority would prefer

to resolve the relevant issues, and the thwarting of a majority’s

view as to the correct judgment. See Cohen, supra, at 223-24;

Michael I. Meyerson, The Irrational Supreme Court, 84 Neb. L.

Rev. 895, 947-49 (2006); Rogers, “Issue Voting”, supra, at

1002-06; Maxwell L. Stearns, How Outcome Voting Promotes

Principled Issue Identification: A Reply to Professor John

Rogers and Others, 49 Vand. L. Rev. 1045, 1063-65 (1996);

Maxwell L. Stearns, The Misguided Renaissance of Social

Choice, 103 Yale L.J. 1219, 1267 n.177 (1994). Thus, even

proponents of issue voting concede that “there is potential

incoherence in an issue voting system” as well. David G. Post

& Steven C. Salop, Issues and Outcomes, Guidance, and

Indeterminacy: A Reply to Professor John Rogers and Others,

49 Vand. L. Rev. 1069, 1083 (1996).

The difficulties introduced by issue voting even may

26

undermine the clarity and usability of precedents, the very

problem that Judge Ambro identifies as a consequence of

outcome voting. See Rogers, “Issue Voting”, supra, at 1009-11.

After all, just seven years after Justice White employed issue

voting to change the outcome in Union Gas, the Supreme Court

overruled that case partly because of the “confusion” it had

created “among the lower courts that ha[d] sought to understand

and apply the deeply fractured decision.” Seminole Tribe of

Fla. v. Florida, 517 U.S. 44, 64, 116 S.Ct. 1114, 1127 (1996).

The Court’s about-face can be viewed as “a criticism of the

practice of vote switching” and may “stand[] for the proposition

that holdings produced as a result of a vote switch will have

only limited stare decisis value.” Maxwell L. Stearns, Should

Justices Ever Switch Votes?: Miller v. Albright in Social Choice

Perspective, 7 Sup. Ct. Econ. Rev. 87, 155 (1999). Problems

therefore attend to either voting protocol. “Rather than rail at

the dilemma wrought by the imperfections of our system [of

outcome voting], . . . we should recognize that these

imperfections are simply part of the inherent limitations of

humanity.” Meyerson, supra, at 952.

To the extent that judges find the voting paradox

dissatisfying, instead of abandoning the longstanding and

widespread practice of independent outcome voting, they can

avoid the paradox by not considering issues after addressing an

issue that would for them resolve the case. See id. at 951; Post

& Salop, Issues and Outcomes, supra, at 1072 (noting that the

paradox can only occur if “the judges reveal their views on each

of the underlying issues presented by the case”). Unlike issue

voting, the decision not to reach unnecessary questions, even

when that decision involves not deferring to a majority on an

27

issue and results in a judgment not supported by a single

majority rationale, has firm roots within our appellate court

practice. See, e.g., Cruz, 932 F.2d at 233 (Cowen, J., concurring

in the judgment only); Lowry v. Balt. & Ohio R.R. Co., 707

F.2d 721, 723 (3d Cir. 1983) (en banc) (per curiam); see also

Rogers, “I Vote This Way Because I’m Wrong”, supra, at 449

n.27 (collecting more than two dozen such Supreme Court

cases). Indeed, the voting paradox may so seldom appear in

appellate court opinions because the judges in the majority as to

outcome “typically do not reveal their views on issues that they

‘do not need to reach’ in order to vote for” that outcome. Post &

Salop, Rowing Against the Tidewater, supra, at 748.

Again, it surely is not for me to tell another judge how to

vote. Yet I cannot help being aware that there would not be a

voting paradox here if Judge Ambro had gone no further after

concluding that the District Court’s dismissal of the complaint

should be affirmed on the ground that 3201 Realty lacks

antitrust standing. There is no doubt that if Judge Ambro had

followed this approach, we would affirm based on his and my

independent reasoning. See Hartnett, supra, at 142-43 (“In

[Union Gas and Fulminante], not only did the judgment

ultimately entered fail to reflect how a majority of Justices

believed the case should have been decided, but worse,

unnecessary statements in opinions altered the judgment in the

case. . . . That is not a result we should welcome . . . .”).

In fact, if Judge Ambro had gone no further after

concluding that the District Court’s judgment should be

affirmed because 3201 Realty lacks antitrust standing, we

inescapably would affirm regardless of whether we used

outcome or issue voting. If we used outcome voting, then two

28

judges, Judge Ambro and I, would be voting to affirm. If we

used issue voting, then the vote on the Noerr-Pennington issue

would have been equally divided, with Judge Fuentes rejecting

the defense of immunity and with me accepting it. The

consequence of that even split is that the District Court’s order

of dismissal would have been affirmed by an equally divided

vote. See Exxon Shipping Co. v. Baker, 554 U.S. 471, 484, 128

S.Ct. 2605, 2616 (2008); In re Mkt. Square Inn, Inc., 978 F.2d

116, 121 (3d Cir. 1992). Though the District Court did not

address the Noerr-Pennington issue as it had no need to do so

because 3201 Realty did not convince the Court that it had

antitrust standing, still defendants advanced the defense in that

Court so that the claim of Noerr-Pennington immunity was

preserved and thus defendants properly could raise it on this

appeal. Accordingly, the usual rule that an equally divided

appellate court leads to an affirmance of the trial court’s

judgment would apply.

Judge Ambro contends that if 3201 Realty had prevailed

on the standing issue in the District Court and if the defendants

were not barred from appealing by the final judgment rule and

had appealed, we would have affirmed on the standing appeal.

Then if defendants prevailed on the Noerr-Pennington issue in

the District Court and 3201 Realty appealed we would have

reversed. Thus, 3201 Realty would win the case even though a

majority of the panel thought it should lose. While Judge

Ambro may be correct on this point this hypothetical set of facts

did not happen.

Furthermore, a different hypothetical supports the use of

outcome voting. Suppose this appeal had been decided by a

single judge. If I had been that judge, then the District Court’s

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order would be affirmed. If Judge Ambro had been that judge,

once again the District Court’s order would be affirmed. Only if

Judge Fuentes had been that judge, would the District Court’s

order have been reversed. I cannot understand why the

circumstance that we are all on the panel should lead to a

different result than that which would have been reached

individually by a majority of the panel.

Issue voting “is in considerable tension with the

traditional emphasis, rooted in Article III, on courts as case

deciders.” Hartnett, supra, at 134 n.58. As has long been true,

“[t]he question before [us as] an appellate Court is, was the

judgment correct, not the ground on which the judgment

professes to proceed.” McClung v. Silliman, 19 U.S. (6 Wheat.)

598, 603 (1821). Although almost two centuries have passed

since the Supreme Court decided McClung, the law that the

Court stated there remains good law and no court has better

expressed the principle that it recognized. Inasmuch as two of

the three members of the panel agree that the judgment was

correct, though for different reasons, surely we are constrained

to affirm.6 Because the Court does not reach this result and

because I believe that defendants have a Noerr-Pennington

defense, I respectfully dissent from the outcome the Court

reaches even though I agree with Judge Fuentes on his

resolution of the standing issue.

6 In my view, this case can be resolved by making simple

mathematical calculations that do not require that we use a super

computer: (1) one and one make two, and (2) two out of three is

a majority.